BloodhoundBlog

There’s always something to howl about.

Month: August 2006 (page 6 of 8)

August 10, 2006

Psst, buddy . . . Wanna buy some leads?

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Suburban Phoenix Real Estate Broker

Author website

So I got spammed by Realtor.com this morning. Turns out that they’re not soaking enough money out of us already for the privilege of repackaging the content we provide to them. Now they want to sell us CMA leads, a la HouseValues.com. These leads would have stunk pre-Zillow, but I can’t imagine how they could be worth anything at all by now. So I’ve been kinda grumpy about this all day. But then I had a warm call, a motivated buyer from Realtor.com. Cathy’s been optimizing our stuff there (with money, mostly), so maybe it’s paying off. I’m still not buying any unmotivated CMA leads, but I’m not grumpy anymore.

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August 9, 2006

Pinocchio wept: The map is never the territory, so even a much, much better Zillow.com clone would not be able to evaluate real property . . .

by

Suburban Phoenix Real Estate Broker

Author website

David G. from Zillow.com replied to my post yesterday which argues that Zillow.com Zestimates are bunk, which I had proved to my own satisfaction in an earlier post. I’m revisiting the topic — to everyone’s delight, no doubt — because I want to drive the point home, and because I want to illustrate how a business like Zillow.com could do a better job — which would nevertheless still fall short of Zillow.com’s fraudulent promises.

I’m going to draw from a few places. This is David G:

So, why is it inappropriate to comment on your “debunking Zillow” series? Well, frankly, I think you’re entitled to your opinion and I respect it. I may disagree with you; but how does saying that help this conversation?

I cannot for the life of me imagine how anyone could reason rigorously about the argument I made and yet disagree with it. You cannot evaluate a house without seeing it. That seems to me to be beyond dispute. I’d be amazed if Zillow.com were to admit it, but they cannot deny it.

There’s more here, of course. No one with any sense at Zillow.com would buy or sell a home without a professional opinion of value.

But give the man credit. He doesn’t deny the truth. He just doesn’t quite admit it:

In many respects, I actually agree with you; Zillow does not replace visiting a house and its comps or a strong knowledge of the local market.

On the other hand, take a look at these promises, made on Zillow.com’s home page:

What is Zillow promising if not “knowledge” of the values of homes it has never seen?

Do you think this is ambiguous? This is from the Zillow.com “About Us” page:

Why not help consumers by giving them access to the same kinds of information and tools agents use?

Do you get the impression that what is meant here is “visiting a house and its comps or a strong knowledge of the local market”? I don’t.

David G. again:

Also, I find your argument applies equally to any AVM.

AVM is Automated Valuation Model. And David is 100% correct. All AVMs are equally fraudulent if they claim to Read more

August 9, 2006

Mapstopia: A strong first day . . .

by

Suburban Phoenix Real Estate Broker

Author website

We left the visible work visible. If you click on the “Go” button, you’ll get a Google push-pin at our house. If you click on the link in the text balloon, you’ll get the web page I made for our house when we bought it. If you type in any other address anywhere, you’ll go there, but the web site is hard-coded for now.

We’re focused on the database challenge for now, to be followed by the searching and sorting challenge, to be followed by the thrashing under a datalanch problem. A “featured listings” map from here is not problem, and we may do that using the Trulia feed (because it’s clean and because it’s there). But what I want is to suck down the entire MLS every night and use that as a visually intuitive IDX search tool — which I’ve written about before.

My input has been minimal and completely conversational. This is entirely Cameron’s triumph, and he didn’t know the Google Maps API even existed before last night.

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August 9, 2006

Mashterpiece: The return of the prodigal programmer . . .

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Suburban Phoenix Real Estate Broker

Author website

Those are the Swann Boys in April of 2001. My father, James Swann, is to my right, my younger brothers, Matthew and Michael, are to my left, and my son, Cameron, is the little kid in front of me who is being so lovingly coerced. I use a thumbnail of me from that photo in all of our marketing stuff for four good reasons: I’m always going to look like Fred Flintstone no matter which photo I use, we don’t do personality marketing, so it doesn’t matter, Cathy and Odysseus are the cute ones anyway, and that was a very happy day for me.

Cameron is almost 15 by now. That’s him to the right — an astoundingly large specimen, considering that I used to hold him in the crook of my elbow.

He just got back from spending six weeks with his mother in Seattle. When he left, I was just putting BloodhoundBlog together in WordPress, so he came home to a lot of changes. Cameron is our better, smarter programmer. He wrote the current versions of most the software we use to drive our web sites. But while he was away, I discovered dozens of new projects I want him to undertake, starting with this.

I’m curious to see how all this works out. When I was Cameron’s age, I was a teenage photo geek, so I always made good money on the side. But my son is a web programmer growing up in an environment where he has plenty of opportunities to make a whole lot of money (for his age) doing really interesting projects. I can’t do the same quality work he can do, but I can design, manage and test the work he does, and I can direct his efforts toward the best profits for all of us.

It’s kind of a mash-up of disparate skill-sets, and I’m interested to see where he can take it.

Further notice: If you sneak over here, you’ll see the work in progress. As I write, when you zoom in, you’ll end up right over our house. We’re the brown roof, three homes in from Read more

August 9, 2006

Owning versus renting: In the long-run, owners appreciate their returns . . .

by

Suburban Phoenix Real Estate Broker

Author website

Searchlight Crusade has a compelling comparison of the financial benefits of buying a home, as opposed to renting:

Once you have bought, you step off of that one way escalator of rising rents. Rents increase at a yearly rate about comparable to inflation in most cases, and rents never drop. I have never heard of a rent decrease except in areas that were so far gone they might as well have been war zones. You only borrowed $X when you bought, and unless you take cash out (which is under your control) you should never owe more money next year than the previous one.

So buying stops your situation from getting worse. What about making your situation better? First off, I need to observe that with rising rents, your situation will always get worse until you sell. But buying really does make your situation better. Not immediately; there’s always a hit for buying, and it always costs money to sell. But within a couple of years the average person will be above any reasonable return they can earn any other way, and the reason is leverage.

Fact one: you always need a place to live, and the options are to rent or to buy. Renting typically requires less cash flow, but returns nothing. Once you have bought, all that lovely appreciation belongs to you and nobody else but. Let’s look at an actual scenario for San Diego, one of the highest priced places to buy.

The article runs through a side-by-side, dollar-for-dollar comparison of the costs and benefits of homeownership — even in a high-priced area like San Diego in a slow market.

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August 8, 2006

Goodyear burns rubber in pursuit of growth . . .

by

Suburban Phoenix Real Estate Broker

Author website

From the Business Journal of Phoenix:

The city of Goodyear Tuesday announced a plan that will extend its southern border down to Mobile and nearly quadruple its population.

The southwest Valley community has expanded its General Plan area by 70 percent to include about 61,000 acres. The 95-square mile area is bordered by Patterson Road to the north, State Route 238 to the south, the Sonoran National Desert Monument to the west, and the Maricopa/Pinal County line along the east edge.

This is the town due east of Buckeye, which is also growing at a furious pace. This is amazingly ambitious.

In the professional prescience department, I have been telling my clients this for years:

“We believe eventually the Loop 303 should be extended all the way south to Interstate 8, providing a second access point for Estrella Mountain Ranch residents and to provide better circulation for everyone in that area,” said Krauss.

And there are more shoes to drop on the route of the 303…

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August 8, 2006

Tell the world: Zillow.com is bunk . . .

by

Suburban Phoenix Real Estate Broker

Author website

I wrote Debunking Zillow.com on July 25th, two weeks ago today. Without being arcane or technical, I think it completely demolishes the idea that Zillow.com can — or ever can — provide reliable home values. Nathan Hughes at Richmond Business and Commercial News wrote about my post, and, in a comment there, I said:

The Zillow mystique is analogous to the aura that surrounds the nutritional supplements business. No one can possibly confuse a clerk in a GNC store for a physician, but people like the idea of being liberated from the dictates of their doctor while going one up on him at the same time.

We know that Zillow.com rides the Cluetrain, or seems to. When I teased them, they teased back.

Why, then, have they not responded to the much more serious allegation that their base epistemology categorically forbids the very results they promise to deliver? I believe that what Zillow.com does would be actionable professional malfeasance if done by a real estate licensee. If the owners of Zillow.com think I am wrong on one or both points, why haven’t they risen to answer my charges? If they can prove me wrong, why haven’t they done it?

Google me this. Or this. If I am wrong, they need to shout me down right now.

But I’m not wrong, am I? Cum tacent, clamant. Their silence speaks louder than any words: Zillow.com is bunk.

It is the duty of the entire real estate community — and in this company I include the recent dot.com entrants, licensed and unlicensed — to guard consumers from hoaxers, con-men and frauds. I have no doubt that the owners of Zillow.com have the best of intentions. Nevertheless the results they produce are necessarily erroneous — and I have zero doubts that they know it. I think this is a case where everyone who cares about the true value of homes — or simply The Truth in the abstract — should stand up and be counted.

The fact is, if you eat whole bottlesful of the quack nostrums they sell at GNC, nothing will happen to you. The contents are completely inert, with Read more

August 8, 2006

Be it ever so humble, investment value takes time to accrue…

by

Realtor, Staging Consultant

Author website

Yesterday, a counterpoint frequent-visitor asked me, by commenting on my Is the Blame Game best played solitaire? article,

So tell me, should one buy a home in Phoenix right now if they know they have to sell it within three years?

To which I replied

Now is certainly a good time to buy in Phoenix… We’re enjoying a buyer’s market, which as you know means there are more sellers than buyers, and interest rates are still relatively low, as low as they’ve been since April, and at just over 6%, they’re in the zone of what we’ve come to expect over the past five years. I’m not talking about creative financing… I’m looking at 30-year fixed rates, which are actually too conservative for the typical home buyer, who doesn’t plan to live in the same house for 30 years.

If you’re going into an investment with the thought that you’ll have to sell it in three years, I’ll suggest that you talk the investment over, whether it be an investment in real estate, stocks, bonds, fine art, etc., with your financial advisor. And then, if you are satisfied that you can afford to invest in anything that doesn’t have a guaranteed return, that is if you can afford to take on some risk, I will be honored to help you find a home that is likely to appreciate over the next three years, where you should end up selling for a profit after costs. (And, you weren’t paying rent over those three years.) Of course, whenever you consider investments, there’s always risk – risk of being too aggressive or risk of being too conservative then kicking yourself down the road because you didn’t take advantage of that golden opportunity…

But in real life most people don’t buy their homes knowing going in that they’ll have to sell in three years. Most people buy homes with plans to, well, make homes of them.

Today, Free The Drones points to CNN’s Asset Allocator calculator, which — to no one’s surprise — puts the minimum time frame to cash out in the 3 – 5 year range. I Read more

August 7, 2006

Flinch!: Whipsaw sellers to get the house you want at the price you want . . .

by

Suburban Phoenix Real Estate Broker

Author website

Ardell has a story today about a multiple-bidder contest that occurred I know not where. As described, the situation would have been an Undisclosed Dual Agency in Arizona — even though both of the clients betrayed were buyers. Two agents of the same broker engaged in a bidding war, which means that the broker himself was pitting two of his own clients against each other, to his own benefit and contrary to the interests of both.

The story put me in mind of our own recent seller’s market. It was a lot of fun to be on the listing side. List on Thursday and the offers start coming in before the photos are integrated into the listing. Put everybody off until Monday, just let ’em pile up. Cathy wrote software to compare net sheets on an apples-to-apples basis, so we could winnow a stack of 30 offers down to the two or three most worth looking at and just ignore the rest — with the seller’s permission, of course, and always with a note of thanks faxed to the buyers’ agents.

But being on the buyer’s side was no fun. The house lists at 10:20 on a Sunday morning, heaven knows why. We’re there by 11. The lister says, “We’d love to have your offer, but it’s only fair to let you know that we already have five — and I’m expecting six more. Pound out a contract on the laptop at Denny’s, stealing power for the portable printer. Huge earnest deposit, non-refundable. Huge down payment. As-is. No appraisal contingency. Double-think and double-think and double-think the price, figuring out exactly where everyone else is so we can be a couple thousand dollars higher. Race it back to the lister by hand.

Hustle back to the office, where the fax machine is already spitting out the bad news — the worst news, really. Not a rejection. Not a counter. No, the worst possible fate in a market that crazy: A Multiple Counter Offer.

The buyer says, “A counter is a counter, right? Acceptance is transmittal, right? That’s what you told me. So all we have to Read more

August 7, 2006

Christmas in August for some, three years of excuses for most . . .

by

Suburban Phoenix Real Estate Broker

Author website

Apple’s World Wide Developer Conference commences today. Steve Jobs’ keynote speech will feature announcements for a rash of products that Mac users will find under their Christmas trees and Windows users will get in buggy, stripped-down, Yugo-like versions three years from now. This is off-topic (and mean, albeit true), but since Apple drives so much innovation in computing technology, it’s news for the real estate community nevertheless. The really interesting thing for me is how radically Mac developers are rethinking user-interfaces. We’re all too busy reading Andersonto realize that we might-could-should be reading Kurzweilinstead. Macintosh development is more than a few steps back from The Singularity — but it’s on the path. Now think of this: If you were offered the chance to transition from mere mortal flesh to something much more enduring — is this a task you would entrust to Microsoft…?

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