BloodhoundBlog

There’s always something to howl about.

Month: July 2006 (page 2 of 6)

July 28, 2006

The buyer can — and should — negotiate the buyer’s agent’s compensation . . .

by

Suburban Phoenix Real Estate Broker

Author website

My phone hasn’t rung yet, but my ears are already burning. My column in today’s Arizona Republic: Buyer should negotiate compensation for agent. (A more-permanent link.) This is Ardell’s turf, of course, although my take on The Big Picture is somewhat different. In any case, I expect to have my ears — and, heaven help me, not my hide — well warmed today.

Buyer should negotiate compensation for agent

Last week we established that the buyer pays for everything in the purchase of a home. Why, then, does the seller negotiate the sales commissions?

The short answer is, because that’s the way it’s always been done. The longer answer is not as pretty: Historically, only sellers were represented in a real estate transaction, and, despite efforts at reform, the buyer is still often treated as a second-class citizen.

Consider the buyer’s agent’s bonus, for example. It will be there as plain as day in the listing: “Seller to pay buyer’s agent a bonus of $5,000 for successful close of escrow by Aug. 31.”

What does that say? It says in the plainest possible language that both the seller and the listing agent believe that the buyer’s agent really works for the seller, not for the buyer. The objective of the bonus is to induce the buyer’s agent to push the buyer into buying the home that is offering the bonus, rather than another.

The goal, motive and purpose of a buyer’s agent’s bonus are to give the buyer’s agent an incentive to betray his agency. His fiduciary duty is to the buyer. The seller and the listing agent are using the bonus to “buy” his fidelity.

So what should a buyer’s agent do, when showing a home for which a bonus is offered? Disclose the bonus to the buyer and commit to either waiving the bonus or passing it through to the buyer. There should be no doubts in the buyer’s mind about the agent’s loyalties.

But there’s more to this issue: If the seller can negotiate compensation with the listing agent, why can’t the buyer negotiate compensation with the buyer’s agent?

The short answer is, because it’s never been Read more

July 27, 2006

A map mash-up on steroids: Building the perfect beast . . .

by

Suburban Phoenix Real Estate Broker

Author website

The software specification shown hear harkens back to this weblog post in reaction to The Future of Real Estate Marketing‘s remarks on ShackYack.com, a particulary robust real estate seach tool using a Google Maps mash-up for its interface. Cathy and I designed this as a futher elaboration on the ShackYack.com model. Given that maps are now free (shudder!), there’s is no reason to hoard this design, and every good reason to throw it out to the world in the hopes that someone will implement these ideas.

PROBLEM: MLS search systems (at least ours) are inadequate. The programmers aim for easy-to-use interfaces with no SQL-like access to the data.

PROBLEM: End-user search systems (like IDX) are inadequate, too dumbed down and unsatisfying.

PROBLEM: Neither sort of search is comprehensive; only MLS listings are shown.

PROBLEM: Either sort of search leaves too many unanswered questions.

OPPORTUNITY: A search system like ShackYack.com is very satisfying, even if it is still inadequate and limited.

SOLUTION: Mash it all even more: A ShackYack-like interface to a high-octane search engine (extensible on the fly so as not to be too daunting) of both MLS and XML-fed or user-entered FSBO listings, with on-line shopping-like features, side-by-side comparison features, user selection and exclusion, and, finally Zillowish comping of the short list against active and sold listings — all of this still and always reflected on the ShackYack-like interface.

I. Search. Full SQL/RDBMS, reflected in the user-interface.

II. Database. Full local MLS plus any acquirable XML feeds of FSBOs, with a form for do-it-yourself one-off FSBOs. ShackYack is using shades of gray to reflect relative price, but it would make more sense to me to use separate colors and shades of those colors to reflect types and relationships of listings.

III. Search interface. Basic search always visible, with pop-outs to add or remove more robust types of search categories. If some MLS data is limited to members, as it is now, certain search categories would be available only to logged-in MLS members. The trouble with a ShackYack-like search is that too many pertinent criteria are missing. It’s fun to play with, but for a true home search, you’d be Read more

July 27, 2006

Color me stupid, but . . .

by

Suburban Phoenix Real Estate Broker

Author website

…I don’t get it.

The Future of Real Estate Marketing avers that Trulia.com’s release of its map interface is a shudder-inducing disaster for other developers. This on the heels of yesterday’s reporting on Zillow.com’s release of its API to individual brokerages. There’s more news on both announcements at RealtyThoughts.

Is this exciting news for Realtors? Possibly. Gee whiz technology is like CheezWhiz — a little goes a long way. There may actually be a qualified, motivated real estate buyer who says, “If only I could see all the properties on an interactive map.” If so, that person is only surrounded by eleven other qualified, motivated buyers saying, “If only there were more photos…”

That’s as may be, and this stuff will surely be deployed. If I were Trulia.com, I would hook into that Zillow.com back-end and disintermediate the behotches: All the usual Truila details-in-a-box plus the completely unreliable Zestimate. If Zillow won’t roll over, someone else will.

But this is my question: How the hell are either of these two quivering little firms going to make money on this? “Advertising!” they shout in unison, but the advertising is on their home pages, where these APIs aren’t. Each one has a little click-back button to take self-selected volunteers back to the home planet. But if I’m getting the milk for free at LargelyUnobjectionableAtlantaHomes.com, why the heck would I go to the dairy?

If anybody’s shuddering it could be because they’re getting the not-too-subtle idea that what the “2.0” in Web 2.0 means is that investors will be shooting themselves in both feet this time…

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July 27, 2006

“You’ve got mail — and egg on your face”

by

Suburban Phoenix Real Estate Broker

Author website

Yet another dumb tool, LeadAlarm, this one cited by the Inman blog.

The basic functionality Realtors should already be doing with server-side programming or just with rules from an email client. The “gee whiz” voice technology is a bug, not a feature: Voice is a lousy way to deliver data originating in a form. Another three dollar egg for desperate, gullible Realtors…

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July 27, 2006

Get potent ping power for the price of a promo . . .

by

Suburban Phoenix Real Estate Broker

Author website

I read about realPING on the Zillow.com weblog’s coverage of Real Estate Connect in San Francisco. I never think about something until I do. This morning Cathy mentioned the idea of having something on our web pages that would induce prospects to contact us. We have a big phone number on the BloodhoundRealty.com website, but she was looking for something at once sexier and more hi-tech. I did my best not to think about this all day, and then, when my thoughts should have lightly turned to thoughts of slumber, I saw the realPING page.

This is really dumb technology. I never know for sure how much other people understand of software, but I can reverse engineer just about anything I see running — in the abstract, anyway. Understanding an algorithm is a lot easier than replicating it — unless it’s something really dumb like realPING.

I just wrote the basic functionality. The “Get Tracking!” button in the sidebar took longer to make than did GetTracking.php. All I have right now is the basic paging function, not the on-and-off for business hours business, but that’s simple to mimic, also. What I have is a clean-room perfect clone, reverse engineered solely from the descriptive promotional material made available on realPING’s home page. (I didn’t even drill down to sub-pages.)

Here’s my offer:

I will make my PHP files for this function available to you as PromoWare: You put me in your blogroll and the software is yours. No cost, no further obligation, no contracts, no monthly fees, no salesman will call. However: You hold your own hand for installation and support.

To take advantage of this offer, you need two things:

  1. The site this runs from must have PHP installed on it with the mail functions turned on
  2. You need a mobile phone or other device that can receive email or epages sent as email from PHP

Ninety percent of everybody reading this will have both of these things, but if you don’t know, the person you check with is the one who should do the installation and support hand-holding.

I wish I had more time to write software. The other Read more

July 26, 2006

The elemental aimlessness of MLS-lessness . . .

by

Suburban Phoenix Real Estate Broker

Author website

Citing an article from the Boston Globe, the Real Estate Investing For Real bog insists that:

There should be a system where anyone, real estate agents, FSBOs, etc., can list or search for properties.

Great news! Such a tool exists. It’s called the classified section of the newspaper. Not so cheap to list, but searching costs around half-a-buck. Even better, CraigsList.com is free in most markets.

The good news is, the writer already has what he wants — in vast abundance: CraigsList.com, Trulia.com, PropSmart.com, et infinitely cetera. The bad news is, the writer already has what he wants — vastly abundant free or nearly-free listing portals, each of which has its own data structure and feed format. The geniuses who are bringing us all this cleverly-designed white noise don’t actually understand the problems the MLS was created to solve: open listings and the difficulty of coordinating cooperation among agents from different brokerages. So what do we find on CraigsList.com, Trulia.com, PropSmart.com, et infinitely cetera? Open listings and no provision for coordinating cooperation among agents. O!, Brave New World, simultaneously disintermediated and reambiguated. It’s hard to regard this as an improvement.

What the writer really wants is something very much like the MLS, but without exclusive membership, without the mandatory unilateral offer of compensation and without the intellectual property rights of listing brokers. You could say he wants to eat his cake and still have it, but the sad part is, he just might get his wish. Even as loose as we are about internet businesses, I’m pretty sure the Feds would regard such a thing arising privately as collusion. But if the Feds ram it down our throats instead…

The cure for what the writer thinks ails us might be a lot worse than the disease.

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July 26, 2006

If you can’t tell the truth, tell a Big Lie . . .

by

Suburban Phoenix Real Estate Broker

Author website

Zillow.com cannot tell the truth about home values, so it is releasing an Application Programmer Interface to spread its misinformation far and wide.

Who do they hope to enlist with their API? Working Realtors, the people who know best that Zillow.com’s property evaluations are necessarily and unavoidably false.

Could the strategy work? Hide and watch.

Here’s a better question: Could this be the fifth column of a triumphalist Web 2.0, where obvious falsehoods are so widely propagated as to be accepted as truth?

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July 26, 2006

How dare you object that the Little Red Fin wants to eat the bread it didn’t bother to bake?!?

by

Suburban Phoenix Real Estate Broker

Author website

Snipped from the speech Redfin.com CEO Glenn Kelman made yesterday to a Congressional subcommittee:

that we must register our users

He said a lot more than this, of course, and you might go read it all. But much of what he said sounded to me like complaints that Redfin has been expected to hew to the same real estate laws as every other brokerage in Washington or California. The quoted matter in particular, “that we must register our users”, sounds as if Kelman is objecting to even the most minimal interpretation of procuring cause. Too late, we learn the unhappy consequences of not teaching The Little Red Hen in the schools…

Marlow Harris at 360Digest.com has much, much more.

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July 26, 2006

Wells Fargo to offer 40-year mortgages; ninnies aghast as expected

by

Suburban Phoenix Real Estate Broker

Author website

You don’t have to be completely impervious to facts to write for the Arizona Republic, but it helps:

To counteract slow equity build-up, borrowers might want to couple a 40-year term with a biweekly payment schedule, which results in the equivalent of one extra monthly mortgage payment yearly. A biweekly schedule can cut a 40-year term to about 29 years, Rogers said, allowing for faster equity increases and less interest paid over time.

Or you could just move every three to five years, like everyone else.

Update: Another ninny:

But the loan comes with a big asterisk. Non-conforming loans — essentially those for more than $417,000 on single-family homes this year — are amortized over 40 years but must be paid off with a balloon payment at the end of 30 years.

Not only are not going to move for 40 years, you’re not even going to refinance for the first 30 years.

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July 25, 2006

Debunking Zillow.com . . .

by

Suburban Phoenix Real Estate Broker

Author website

Zillow.com got itself a ton of new venture capital yesterday, so today seems like a fine time to deconstruct its praxis.

When Zillow was brand new, Catherine Reagor, the dippy local real estate reporter for the Arizona Republic wrote:

Want a reality check? Go to zillow.com, a new Web site with a program that calculates a home’s value for free. It values several Valley homes for tens of thousands less than the price listed on them.

At the time, I said this in response:

If you want to know what your house is worth, do not go to Zillow.com, which delivers completely useless estimates of value for free. Even Net Value Central, a tool used by professionals, lags the market by a month or more. The only way to price a house is to work as rigorously as possible from current and recently-sold listings for extremely similar properties. If you price your house to sell from sources like zillow.com, you will give thousands of dollars away. If you rely on zillow.com to tell you how much to offer on a home, you will see it sold to someone else.

(You can prove all this to your own satisfaction, if you like. Most of Ms. Reagor’s mistakes seem to come from falling in love with ideas she doesn’t check out. Here she tells us that she ran Zillow.com on live listings and found it came in much lower than the listed prices. How did it do against sold listings? She didn’t check, but you can. Run Zillow.com on the sold homes documented in your local section of the Republic. You’ll see that, time after time, Zillow.com is substantially under real-life market results. It’s a useless toy, which Ms. Reagor might have discovered on her own had she bothered to test it properly.)

Just lately, I needled the Zillowites a little more:

All right, here’s the deal with Zillow.com:

I decide I’m going to buy you a pair of designer jeans, nothing but the best for you. I know that fit is important, so I go to three of your best friends to get their sizes. Not yours, theirs. I strike Read more

July 25, 2006

Word-slinging in the Rain — or: How I learned to stop worrying and love the blog . . .

by

Suburban Phoenix Real Estate Broker

Author website

None of this is new to me — except for the parts that are.

I’ve been writing on the nets since before there were nets. Since BBS systems — I ran two of them at different times of my life. Since CompuServe was a time-share system called MicroNet that charged $3.00 an hour for half-duplex transmission at 300 baud.

(Think about that! “Baud” is Bits of Audio Data. My first modem had an acoustic coupler that attached to a phone receiver and transmitted data with actual, annoyingly audible sound. It raced along at 300 bits per second, which sounds slow but is actually about half-again faster than a really fast typist. The connection through which I am by now continuously enthralled is only about 10,000 times faster than that.)

I’ve been writing on the nets since the time when you would log on, suck down everything you wanted to look at as fast as you could, read and respond off-line, then log back on to blast back your own contributions without wasting a second. I’ve been writing on the nets since waiting up for the “off-peak” hours represented a substantial savings.

The funny things is, when the technology was that grossly inadequate, that obscenely expensive, I was writing maybe 8,000 words a day, seven days a week. And as lousy as everything was, it was a whole lot better than working on a 900 pound IBM Selectric typewriter.

I can barely believe the things I did in those days. With my trusty soldering gun, I built myself a little NULL modem that I could configure on the fly, so I could liberate access wherever I found a temporarily mute dumb terminal. I was young and possessed at the time of a multi-faceted morality, and I tended to think of electrical power and underutilized bandwidth as mine to appropriate.

I wrote through generation after generation of computer hardware and network topography, avidly connecting machines that were never meant to be connected and connecting my own computers to a topology that was still called Arpanet when I first started playing with it.

I worked in Usenet for years, and I Read more

July 24, 2006

Bees have tails?

by

Suburban Phoenix Real Estate Broker

Author website

Seth Godin on Long Tail search term analytics. Identifying strong Long Tail keywords much minimizes your competition per prospect. I think buying the Pay Per Click terms on the keywords you identify would increase your click rate: The organic hit says that you have valid content, while the Pay Per Click hit says that you are really in business, two mutually-reinforcing marketing messages.

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July 24, 2006

Carnival of Real Estate: If you love your clients, set them free…

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Suburban Phoenix Real Estate Broker

Author website

Searchlight Crusade is hosting this week’s Carnival of Real Estate. BloodhoundBlog is featured, insisting that there is always room at the top, and we are lucky to be among such an august company. Everything is worth reading, but two posts stand out for me: Spotlight Realty’s practical example of the risk of letting an unscrupulous agent “buy” your listing by promising you a higher price than the market warrants. And The Reality of Real Estate weighs in on a weighty topic: How exclusive employment agreements can be a disservice to the client.

On the latter point, here is language we routinely use on our Buyer Broker Agreements:

This agreement will be terminated without recourse upon written notice by either party.

“Either party” means I get to fire them if I want to, too (and I have done this). “Without recourse” means clients don’t get to fire me and then sue me. I don’t know that that clause will hold up in court, but it’s worth a shot. We use slightly different language on listing contracts, to make it plain that you don’t get to fire us when we’re already under contract (and, of course, practically speaking, as a matter of agency I cannot fire any client when doing so would be to the client’s detriment; a ship’s captain cannot resign under weigh). But, recalling that everything we do is marketing, granting clients the power to jump ship, if they feel they must, is a very effective way of winning their hearts and minds. If you love your clients, set them free…

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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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