Extra credit: Write to me or post a comment on how The Long Tail applies to real estate marketing.
Technorati Tags: phoenix real estate, real estate marketing
Month: July 2006 (page 5 of 6)
The Council of Residential Specialists is running a Promotional Materials Contest for CRS designees:
Great promotional materials and a solid marketing plan lead to better name recognition, more clients and a better bottom line for your business. They can also lead to great cash prizes and peer recognition when you sign up for the CRS 2006 Promotional Contest.
We are a marketing practice. We believe in marketing like fish believe in water. It would be an error to say that marketing is a part of everything we do. Instead, everything we do is a facet of our marketing vision.
Anyway, I entered two of our efforts in the contest. Unfortunately, if you’re not a member of the Council, you can’t get to the web page where the contest entries are on exhibit. From our own site, here are our two entries:
- A fairytale cottage in FQ Story — This is a web site we built for one of our listings. We do a site like this for every home we list, but this was the best one we did this year.
- How our signs work to sell your home… — This is a marketing flyer that we use to explicate our very elaborate yard sign strategy.
If, perchance, you are a Council member, please feel free to go here and here to vote for our entries. I would never, ever think to spam the voting for an on-line contest. That would reflect too great an understanding of the inter– oh, wait…
The true fact is that, until now, I have been careful not to share ideas with other Realtors. We sit back and look at absolutely everything. If we see something we think shows promise, we deconstruct it down to the original idea, then rebuild it our way, keeping what we think it good, jettisoning the rest and adding everything that is uniquely our own. But for the most part, other Realtors just act bored when we even presume to talk about marketing, so we just sit down, shut up and take it all in. Better for us, anyway: If our competitors don’t understand what we’re doing, they Read more
Cathy’s call to Realtors to change or die was featured in the inaugural edition of the Carnival of Real Estate. Visit the site. We look upon Zillow.com with a jaundiced eye, but the collected articles are excellent.
Technorati Tags: phoenix real estate, blogging, real estate
Our friend Richard Riccelli sends this along from the Boston Globe:
Home sellers are learning what any retailer, from Wal-Mart to the owner of the corner gas station, already knows: Low prices are one of the surest ways to beat the competition.
Coldwell Banker Residential Brokerage, Massachusetts’ largest real estate firm with more than 3,500 agents, is coaching agents on how to persuade clients to list their homes at an asking price that undercuts those of comparable ones on the market.
The hope is low prices will attract more prospective buyers, leading to faster sales. Other real estate agents in the Boston area report success with similar strategies in a housing market with an unprecedented glut of properties for sale.
Called “drama pricing” or “energy pricing,” it is a drastic measure for difficult times. And it seems to run counter to the conventional strategy of selling your home for the highest price possible.
Buyers are “overloaded” with options and “only respond when they see a perception of value,” said Angela Stamoulos, who teaches Coldwell Banker’s course on this pricing technique, which the firm rolled out this spring in Connecticut and last month in Massachusetts.
By grabbing buyers’ attention, she said, “the true market value of the property comes to fruition.”
Newspapers dumb everything down. The topic is not fire-sale discounting but using price to establish market differentiation.
Working with competitive listings, you try to identify a price point at which your home will stand out from the herd. This requires a certain amount of fortitude: You have to be willing to acknowledge where your home stacks up against its competition.
If your home has appropriate upgrades, it might be worth a little more. If it has pet odors, it’s worth a lot less. If you have six nearly-identical competitors, you may have to choose a price lower than you wanted, even if your home is objectively the pick of the litter. In that circumstance, pricing above the true dogs but below the homes that are almost as good can make your house sell while the others languish. Buyers will see your home as the best overall value.
We’re not trying Read more
Catherine Reagor, the Arizona Republic‘s tribute to the enduring utility of the Peter Principle, allows that the method the newspaper uses to report Metropolitan Phoenix real estate values might be a little off-target: Valley’s skyrocketing median home price a bit deceptive:
In the wake of home sales plummeting, the uptick in the median home price may look like the housing market’s bright spot. Some homeowners may be cheered, thinking that their values are climbing. But the figure is deceptive.
The median Valley home price is climbing because the number of pricey Valley houses that are selling has jumped in the past year as the number of more-affordable homes has fallen.
In June, almost 40 percent of all existing homes to change hands sold for $300,000 or more, according to the Arizona Real Estate Center at Arizona State University Polytechnic. Early last year, only 25 percent of all resales cost that much.
Only 14 percent of the houses to sell last month cost less than $199,000. At the beginning of 2005, before Valley home prices started their rapid ascent, 38 percent of all resales were priced below $200,000.
There’s so much wrong with this that it’s hard to know where to begin. As I pointed out the other day, the analysis is inherently defective:
Dr. Butler (and his faithful amanuensis at the Republic) seem not to understand that we just went through a price boom. Fewer houses are selling at less than $200,000, but that’s because there are almost no houses priced at less than $200,000.
From the BloodhoundRealty.com Market-Basket of homes, the average sales price of a home at “the beginning of 2005” was $193,637. The average price of a market basket home in June 2006 was $257,999. If the average price of a home is $64,000 higher, wouldn’t it follow that the entire range of home prices might be higher?
Ms. Reagor can’t or won’t do math. At the least, she doesn’t do math, leading her to regurgitate without question any absurdity enunciated to her by her sources. But there’s really nothing for it. The method the Republic uses to analyze the real estate market is defective, so the reporting would be absurd even if the reporters were careful about verifying facts. From last November’s Bloodhound newsletter:
When newsmakers make pronouncements about the real-estate market, they are conflating everything with everything else: north Scottsdale with south Phoenix, the stately custom homes of Litchfield Park with the ramshackle trailers of Ellsworth Road in east Mesa.[…]
Real estate is non-fungible. That’s the fancy way of saying that no one home can be substituted for another. So, to say that homes in greater Phoenix appreciated by 47 percent from July 1, 2004, to June 30, 2005, is interesting, but it is not hugely revealing. It conflates too many unlike homes and neighborhoods to be valuable.
It’s much more useful to note that the 1,603-square-foot Terracina floor plan in Ashton Ranch in Surprise appreciated by 67 percent in that same span of time. The 1,313-square-foot Vail floor plan in Rancho Santa Fe in Avondale was up 56 percent. The 1,273-square-foot Sterling model in Fletcher Heights in Peoria gained 56 percent in value.
The Republic‘s analysis of the market takes the aggregate of all recorded transactions to strike a median for the entire Valley (however defined — nothing is revealed of the underlying method). That means everything from trailers to mansions, presumably from Wickenburg to Apache Junction. Wouldn’t you feel much cooler, in the heat of the Arizona summer, if you knew the median temperature for the continental United States? The smallest area the paper deals with is a zip code, which can be a vast and very diverse region. There is nothing like true comping, not house-to-house, not among homes within a subdivision, not among similar subdivisions. This is not the worst possible methodology, but it is very, very far from good.
So even if the reporters were careful, even if the quoted sources were held to facts, rather than gut feelings, even if the numbers used were transparent and made available for independent verification, still the reporting would be erroneous, at best. The method used to arrive at the ‘news’ is faulty, and, hence, the results are faulty.
Technorati Tags: phoenix, phoenix real estate, real estate
I discovered LaunchCast radio from The Long Tail
This sounds like a lot of work, but mainly you’re just listening to the radio while you work. The difference is, it’s a radio station that is progressively more to your taste, and progressively less annoying. I have a love/hate relationship with XM radio in my car. Even so, I almost never listen to broadcast radio, because, for all its faults, XM is still much better. We have a vast collection of music ripped to MP3s, fed by iTunes from my Mac to a stereo in our office. We call this WHFO, and we had thought it was about as good as we were going to get in a radio format. LaunchCast blows all of this away. It starts out pretty good, but even if you do no more than weed out the stuff you hate — motivation abounds — it will get better and better with time.
Give it a try. There’s a free version that you can test-drive for 600 songs a month. The premium product, highly recommended, is $35 a year. I’m a Realtor. I live in my car. If I could have LaunchCast in the car, XM would be hauling its satellites to the junk yard…
This nests pretty deep, so hang on tight. First, SFHomeBlog.com cites The Walkthrough weblog at the New York Times, which in turn quotes a letter received from the The Marlin Real Estate Bubble weblog. Here is the letter:
I’ve lost my faith, at least for Marin County. Despite all reason and rationality to the contrary, I am no longer so sure that Marin County will succumb to a collapsing housing bubble. I’m actually starting to think that somehow Marin (and maybe the Bay Area at large) is not subject to the same laws of economics as everywhere else. Seriously. This contrarian is “throwing in the towel” and capitulating for the present (which must mean the collapse is on the verge of happening). I dunno, maybe I’ll get over it and start blogging again tomorrow but as of today I am so discouraged that I can’t bring myself to it.
Anyway, the point of this email is that my blog is going silent for a while. If Marin starts to tank then I’ll resume blogging to document the downfall and to rub it directly in the face of Marin hubris and arrogance (and I’ll still be compiling charts during the silent period so that I can show them in the future). I just wanted other bloggers to know why my blog is going silent for a while so that you could decide whether or not to keep linking. I won’t ever take the blog down as there are good resources there.
Unless you can talk me into believing again what must be true, that Marin is not special…
SFHomeBlog’s take:
Perhaps he finally realized that real estate really is local and there are places (like San Francisco) where demand always exists. We’re seeing a different market from last year, but it’s nowhere near a ‘bubble’, and in my world, I’m not seeing anything but a good, balanced market.
For some people, the sky is always falling, and they refuse to consider that real estate might not fit into their Templates of Doom. In addition to persistent demand for particular locations, home sellers in a buyer’s market are a Read more
Kudos to Ardell DellaLogia for her condemnation of Buyer Agent Bonuses!
The mere concept that a Buyer Agent will be enticed to lead a buyer to one house over another, because of the amount of money that Buyer Agent will make when it sells, shoud be offensive to every single agent in this country
In her response to a flame that appeared anonymously as comment to my article, In the 21st century world of real estate, nothing says ‘roadkill’ like a dead dinosaur… (ahem, Ardell), she courageously explains why she has chosen to eschew membership in the NAR:
Does anyone really think it matters if I go over and slap my $500 or so over at the Board of Realtors on Monday to “become a REALTOR”? Does taking five minutes out of my day and $500 out of my pocket really make any difference in who I am or how I do business with my clients? I think it is more honest and ethical to be true to myself, and stay out as long as I agree with the DOJ’s position. I think it is more honest and ethical for me to stand outside the fray until our basic thinking is more in line, than to be a member who dissents from within. I’m the one who has to look at myself in the mirror in that regard, and make a personal choice. At present, this is the one I can live with.
With this single article, Ardell has joined Curtis Hall, a 1980s pioneer of Buyer Agency, as one of my Real Estate Heroes! (Trust me… Curtis, from whom I took my ABR classes, is far more fascinating in person than his web presence expresses.)
I was writing today, and I realized that spell checking, for all its added efficiencies, isn’t terribly smarter than it was on the dedicated text-processing systems of the 1980s. It made the jump to desktop machines, of course, a trusty sidekick of word-processing, the first true “killer app” of micro-computing. But both were quickly eclipsed by spreadsheet software, and text management tools have been a red-headed step-child on desktop systems ever since. Everyone needs them, and everyone hates them when they don’t work properly, but no one lays awake at night wondering what new computing paradigms might be expressed in future versions of their favorite word processor.
And spell checking has had it even worse. It’s the sidekick to the step-child, after all. If it had a more tangible form, it might be stuffed into a junk drawer, handy to have around but usually just in the way. Spell checking has missed virtually all of the internet revolution, of course. Many web development tools incorporate spell checking, as do some on-line web sites. But there was no formal presence for spell checking in the Web 1.0 paradigm. No spelling look-up servers. No advertiser-supported spelling portals. No spelling IPOs. In fact, not one single wide-eyed investor pissed away his retirement savings on a Web 1.0 spelling start-up.
Worse yet, it seems almost certain that spell checking will be passed by in the forth-coming Web 2.0 revolution. This would be unfortunate, since spell checking is in fact the perfect Web 2.0 application–er, platform. Note these criteria from Tim O’Reilly’s seminal paper on the characteristics of a Web 2.0 platform:
- The Long Tail
- Data is the Next Intel Inside
- Users Add Value
- Network Effects by Default
- Some Rights Reserved
- The Perpetual Beta
- Cooperate, Don’t Control
- Software Above the Level of a Single Device
If we envision a product–er, application–er, platform called SpellCheck 2.0, we can incorporate all that stuff and then some.
It may occur to you to ask, “Why?” That’s really a pre-Web 1.0 question. Web 2.0 is not about getting things done, it’s about getting people together. It’s not about what we as a club-composed-of-people-who-have-never-met have accomplished, it’s about how we feel about it. Read more
Why do velociraptors no longer roam the earth? Because they couldn’t change. For all their ferocity and intelligence, they were not able to adapt to their changing world. Not able because they were not blessed with the human triumph of will, they couldn’t want to change, and so they became extinct.
What’s a Realtor’s excuse?
In today’s world of Web 2.0, disintermediation, and DOJ scrutiny, anyone in this industry who doesn’t believe the real estate business in the 21st Century is going to be dramatically different from the last century is going to be in a world of hurt. The only way to survive will be to embrace that change.
Ardell DellaLoggia started an excellent thread on Seattle’s Rain City Real Estate Guide, where she has a conversation about buyers’ reps changing their worldview on buyer compensation.
Clearly, the Buyer Agent truly treating the buyer as a client, is the key to the future of our industry. As long as agents continue to think that the seller is paying their commission, when they are representing a buyer, they will continue to treat the buyer as a second class citizen in the real estate transaction.
Be sure to read the entire thread to get the most out of it.
But, closer to my own heart is Allen Wright’s post on RealBlogging, which also recommends we re-evaluate the method of Realtor compensation. Closer to my heart because he asks the essential question:
As a real estate professional maybe we should take a step back and ask a more serious question, “What value-added-service am I providing?”
I like being in a commission based industry. I like being paid for my results, not just my efforts. There are 1,200,000 of us all expending some type of effort, a consumer might assume. But who is actually creating value for his clients through that effort?
Some business models such as discount service brokers and the Redfins of the industry have answered this question by saying “we’re not going to give you added value, but we’ll give you what you have come to expect from Realtors for less than Realtors typically charge.” For some consumers, this Read more
Quote: “Double-dipping isn’t very far from double-dealing, and dual agency has always been the Achilles’ heel of the real estate industry.” That’s me in today’s Arizona Republic. Here’s a more permanent link. And here is the BloodhoundRealty.com policy on dual agency. The topic is important enough to us that I want to quote the entire article here.
Dual agency benefits neither buyer nor seller
Imagine you’re in a lawsuit. You’re representing yourself, but, as the suit progresses, you realize your opponent’s attorney is particularly good – thoughtful, incisive, attentive to detail.
At an appropriate moment, you say, “You’re doing such a good job representing his interests, I know you could do just as well representing mine too.”
You now understand what’s wrong with dual agency in real estate.
Dual agency is the fanciful idea that, at the same time that I am zealously and faithfully representing all of your interests as the seller, I can perform the exact same services for the buyer of your home.
In fact, if I am acting as a dual agent – fully disclosed and consented to by both parties – I can’t provide zealous representation to either party.
Instead, I become a facilitator, a go-between, a messenger. I can’t advise one client in a way that would hurt the other. I owe the same, insanely limited duties to both parties.
This applies even if two different agents from the same brokerage are involved. The contracts are with the broker, not the agents. The broker represents both parties.
The individual agents should act as facilitators. In reality, each will act as an advocate, actively betraying the interests of the broker’s other client.
So how much will the broker get paid for this farce of his fiduciary duties?
Double.
All of this predates the idea of buyer’s agency altogether. When brokers represented only the seller, the buyer was never represented. If the listing broker could scare up a buyer on his own, he didn’t have to split the sales commission with a cooperating broker.
Double-dipping isn’t very far from double-dealing, and this has always been the Achilles’ heel of the real estate industry.
So, even now, when buyers have Read more
From RealEstateJournal.com:
After getting five estimates — four from online sites, and one from a professional appraiser who inspected the home in person. We were told the home might sell for anywhere from $291,000 to $375,000 — an $84,000, or 29%, spread.
The appraiser is probably closest to the mark, of course. Completely automated systems like Zillow.com can be accurate by accident, much as a gift-buyer might be accurate buying you clothes using measurements obtained from your friends. In many cases, I can tell practically to the dollar what a home will sell for. Other homes defy prediction. Certainty is never hard to find, though. If you want to know what your house is worth, sell it. The home’s value is what you got for it. Everything else is just a guess, no matter how well educated.
Last Winter I represented a couple who bought a home from a pair of ancients who had lived in their house for over 30 years. During their long tenure, they never ran across a memento that they didn’t want to keep. So although we gave them a long escrow, by the last 5 days they hadn’t made a dent in emptying their nest. The seller’s agent, Dan Peacock, a fine Realtor whose license is currently with Homesmart, worked some magic and the house was empty at close, and at the time that’s all I cared about.
But, have you ever found yourself in this situation: surrounded by mountains of stuff, so much that you no longer have any idea of what you have, so much that it’s crowding you out of enjoying your home? And so much that you’re overwhelmed at the thought of how to go about getting rid of it? I was there earlier this year when I sold the family home, which I had bought from my parents eight years earlier. The home was full of memories. Memories of my youngest sister going to Senita Elementary then learning to drive and cruising MetroCenter then going to prom at Moon Valley. Her wedding gown was still hanging in the laundry room and her children’s kindergarten projects for Grandma and Grandpa were still tacked to walls and taped to cupboards. On top of those were my own memories. Memories of my life in the house during the last years of my late husband’s life: Decorating ideas we had cut out from Phoenix Home & Garden and Architectural Digest. Pretty stones we had collected along the shores of Southern California. And more recent memories with Greg and Cameron: Dried flowers from my wedding bouquet. Michael Jordan and Star Wars posters in Cameron’s bedroom. Memories that will last a lifetime, but stuff that was consuming my thoughts and my time. We had moved from that house over a year before, but still all that stuff was there, and we had sold the house.
There was a solution. Yesterday sellsius° real estate blog mentioned it Read more
Thrills, chills, front-page headlines — everything but the truth. It’s a way of life for Dr. Jay Butler of the The Arizona Real Estate Center. Today’s Republic trumpets June was cold month for resales:
The Valley’s resale housing market took a hard fall in June, its worst performance for the month since 2000 and clear evidence that buyers sat out the start of the crucial summer selling season.
That “worst performance for the month since 2000” business is interesting, and it comes straight from Butler. It sounds authoritative, but it’s actually like a baseball card statistic, useful only in context. Dr. Butler doesn’t publish his underlying numbers, so there’s no easy way to compare apples to apples.
Here, by contrast, are real numbers drawn from the MLS system:
Number of Homes Sold
March 2003 6471
2004 8678
2005 9959
2006 7469April 2003 7429
2004 8889
2005 9567
2006 6725May 2003 7428
2004 8932
2005 9853
2006 7582June 2003 7409
2004 9969
2005 10225
2006 7209
I don’t have numbers back to 2000, but it doesn’t matter. June 2006 was remarkably like June 2003. As I’ve pointed out before, comparisons to 2004 or 2005 — of which the Republic never tires — are inappropriate. From March of Read more
From sellsius° real estate blog, citing Forbes magazine, the top ten overpriced real estate markets:
1. Essex County, MA
2. San Francisco, CA
3. San Jose, CA
4. Honolulu, HA
5. Cambridge, MA
6. New York City, NY
7. Tucson, AZ
8. Oakland, CA
9. Boston, MA
10. Los Angeles, CA
I’m sure all of Phoenix is relieved to have missed out on this distinction. Interesting that seven of the ten are either in Massachusetts or California…