Is Quill Realty the Only non-MLS Broker in Seattle?

Updated 9/13:¬†Quill Realty is now Added Equity Real Estate – but everything else is as true today as when I wrote it! ūüôā

I am loving life at the forefront of change in the real estate industry. My firm Quill Realty left the Northwest Multiple Listing Service on July 1. Since then, we’ve picked up some listings and sold a few houses – our first non-MLS sale closed Friday. Congratulations to this beautiful family!!!¬†Single Broker Listings in Seattle

So we’re selling houses at a dramatically reduced cost to our seller clients. In other words, the model appears to be working. Exciting times!

But it begs the question: Is Quill the only¬†non-MLS broker in Seattle? Or are there others, such that a synergy might begin to build. To date, I have yet to find one. I even have a friendly wager with a title representative. He knows lots and lots of people in the local industry, and so far he’s struck out.

Is that right? Is Quill the only voice calling for change in the MLS-bound wilderness? If you know of any others – in Seattle, or Western WA, or even the USA – I’d love to hear about them. Please leave a comment, and thanks much.

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“Zillow Talk: The New Rules of Real Estate”: Zillow Tries Too Hard, Tips Its Hand; the Future of Real Estate Isn‚Äôt Here Yet (But It‚Äôs Close)

Zillow Talk: The New Rules of Real Estate, by Spencer Rascoff and Stan Humphries

Reviewed by Craig Blackmon

This book by Zillow’s CEO and Chief Economist, respectively, is a wonderful advertisement for Zillow. It’s also a good book. It’s easy to read – really easy, clearly written to appeal to the broadest spectrum of readers – and very¬†informative. It does a good job of illustrating the power of data and how it can be harnessed¬†to make the most¬†informed investment decision possible when buying a house.

But the book aims higher. It concludes with some stirring language about the power of data¬†(don’t worry, this doesn’t require a Spoiler Alert): “Numbers don’t lie. And they won’t lead you astray. Indeed, they’ll help you find your way home.” (The same expression dominates the Zillow home page.)

Ah, home. The term is associated with so many wonderful things: family, laughter, love, shelter, protection, and on and on. “Home” is not just a place. It’s a very special place, a destination that is both more common and more unique than any other.

Is this book going to help you find your way to your home? Probably not. In fact, I hope not. Home requires more than a well-researched financial decision. Much more. Besides, any prediction of the future is just that, a prediction, and in the meantime life marches on. A good life needs a good home, regardless of the financial future.

With its focus on the trees and not the forest, the reader is left with a sense that it is much ado about nothing. The book relentlessly¬†promotes the web site, implicitly and explicitly, from start to finish. You’re left wondering: Is that it? Has Zillow really changed real estate? The web site provides useful insight, sure. But it hardly upends real estate, an industry that continues to operate on a¬†19th Century model. Does Zillow show us¬†the final, evolved real estate industry of the modern, technological, information age? ¬†I mean, nobody uses a travel agent or a stock broker anymore….

The answer is revealed by a closer examination of Zillow and the people behind it. I believe Zillow is an ongoing project that will change dramatically as real estate evolves. And it will be instrumental in that evolution. But Zillow itself cannot lead the change. And in the meantime, it uses a business model that keeps it in business, biding its time until the eventual evolution.

This book is a “must read” for investors and real estate brokers, but not homeowners

In other words, folks who make a business out of real estate will benefit from reading this book. It does an excellent job of demonstrating how data – available via zillow.com, a constant underlying refrain ¬†throughout the book – can be used to calculate a property’s current and future value. So if the primary and essentially sole reason for purchasing a house is to make money (or if you sell houses yourself), this is a great book. It’s loaded with a lot of great insight.

For example, did you know that proximity to Starbucks is a good indicator of better appreciation? (Chapter 4) Or that you should list your home between March Madness and the Masters if you want the best chance at the best price? (Chapter 12) Fascinating stuff and worth considering when you are investing hundreds of thousands of dollars. A slightly better percentage return, thanks to in-depth analysis of the available data, can lead to quite a bit more money.

But if you’re looking to buy a home, don’t bother with this book. It’s myopic focus on dollar values simply doesn’t foster a good decision when looking for a home. Should you take into account financial considerations? Of course. But the primary focus should be on finding the right home for you and your family. So, while good schools may be an indicator of future value (Chapter 6), that shouldn’t be the focus. Rather, look for good schools so that your kids get a good education. This is a home. Not just an investment.

Zillow Is Setting the Stage for the Future of Real Estate

In its current iteration, Zillow doesn’t really do ¬†much in terms of bringing the real estate industry into the 21st Century. As the book makes clear, Zillow simply wants to attract as many visitors to its web site as possible. Why? Because Zillow makes money as a lead generator for today’s real estate brokers.

In other words, Zillow currently complements and feeds off of traditional real estate brokers. The more people who use the Zillow site, the more leads that Zillow generates, and thus the more money it makes. Zillow is built on web traffic, nothing more. And it doesn’t do anything to disrupt a long-standing traditional industry, because that industry is it’s target market. ¬†Even though that same industry is ripe for disruption.

Which is weird. Because the guy who co-founded Zillow previously co-founded Expedia. The web site that put travel agents out of business. Rich Barton is a widely recognized and highly regarded “disrupter.” His motto is “power to the people.” He believes that the internet can empower consumers in new ways that lead to better and more efficient ways of doing things. According to Mr. Barton, his companies¬†Zillow and Expedia have “created new opportunities for new professionals to make new businesses for themselves.”

Except that Zillow hasn’t. Not yet, anyway. It’s merely expanded existing opportunities (lead generation) for a long-standing professional industry that allows it to sustain it’s dominant market position. Nothing new there.

But what if Zillow is a work in progress? What if, in only the highest level strategic planning documents, there is a plan for Zillow 2.0? That would start to make some sense.

What the Future of Real Estate is Going to Look Like

Today, there are two ways to sell your home: FSBO, or using the traditional cooperative real estate broker system. Home sellers can market their properties via many different channels other than the local MLS. Including, of course, Zillow, which shows both “Make Me Move” and true “for sale by owner” listings. So an owner is empowered by the internet and can forego using the real estate broker system, which includes payment of a commission to a cooperating agent.

But what if the home seller wants the professional insight and counsel of a real estate broker? From advice on preparing the home to market, to staging, to keeping the seller informed and educated, a real estate broker provides substantial value. And the broker is a trained marketing professional who will efficiently and effectively utilize the full array of marketing channels available in the 21st Century: yard sign, flyer, and open houses and tours, of course; but also web sites and social media.

Today, that real estate broker can exist, thanks to Zillow. With its brand recognition and size, it is used by a large number of home buyers. A “listing” on Zillow can lead buyers to the home, without paying for other agents to bring them. So a home seller can sell for a fraction of the cost, as they will no longer need to pay the 3% buyer agent commission.

In other words, Zillow has positioned itself to be one of the successors to the multiple listing services maintained by cooperating real estate brokerages all over the country. And by positioning itself there, it provides the platform necessary for meaningful change in real estate. But until that change happens, Zillow will sustain itself (and its shareholders) by working within the existing system.

 

HACKED BY SudoX — HACK A NICE DAY.

Funny MLS Photo

Maybe it’s just me, but this had me laughing so hard I was crying. I was looking at homes online with my daughter, Tina, and this was one of the photos. I expected photo #15 to be a picture of the yard…and instead saw THIS!

supra

The caption inside the photo was part of the mls photo, exclamation point too. I didn’t add it. I guess some agents don’t realize that these photos convey as advertising on the Public Sites. ūüôā

HACKED BY SudoX — HACK A NICE DAY.

Go Ahead, Make My Day

Dirty-Harry-Make-My-Day

You know, some days I can really relate to Inspector Harry Callahan. Some days, it feels like being an IDX vendor is a dirty job so unappreciated that only Dirty Harry could fully appreciate it.

Recently, I’ve heard that the NWMLS decided to enact a few more rule changes. Needless to say, I’m all broken up about the new NWMLS rules. The good news is that there will no longer be a 3 download agreement limit. This should allow members to more easily work with multiple vendors, and perhaps better allow members to easily find cost-effective solutions to their IT problems. I think it’s a good idea because it could create more demand for the services I can provide.

The bad news is that starting in October, the NWMLS will charge each entity downloading the IDX data (i.e. the consultant or the broker for an in-house data feed) $30 per month, per agreement. For example, if a vendor A has a download agreement with office A, B, and C, then the vendor will be charged $90 per month. Needles to say, this new rule will seriously hinder your vendor’s ability to inexpensively host web sites or otherwise develop applications w/ NWMLS listings on them.

Sometimes, I got to wonder what are the jive turkeys at the NWMLS are thinking? So now I either have to eat an unwanted (and probably unnecessary) cost or I have to pass on the increase in my costs to my customers? Neither scenario really appeals to me (and probably won’t appeal to my customers either). I’d rather increase my costs by buying more servers, going to Inman SF Connect, buying iPhone app development tools & books, or anything else that would ultimately improve end-user satisfaction with the applications I build. But now I have to pay a tax for merely trying to serve my clients? Gee, it isn’t like developing an Evernet XML download is already as much fun us as doing my taxes is.

My clients are hard working real estate professionals; they are not professional software engineers. They know about as much about creating Zillow XML feeds or developing Real Estate based Google Maps mash-up as I know about selling a home with a troublesome neighbor or if a property is next to a graveyard, does it lower the value because it’s creepy, or does it raise the value cause it’s quiet? Unfortunately, the nature of the world today requires real estate professionals partnering with vendors and/or consultants because real estate consumers increasingly demand high tech services from their agents & brokers and you can’t provide that service without high tech experts working on your behalf.

I’m not opposed to higher taxes if I know it’s going for a good cause. But what is this extra $30/month per agreement going to buy me or my clients? Is the NWMLS going to buy faster servers? Hire more IDX support staff? Throw a big party and spend the money on booze and strippers? Is the NWMLS running in the red and needs a bailout? Seriously, I’d like to know what I’m about to pay for.

Also, wouldn’t it make more sense to charge per vendor instead of per agreement? A vendor needs the same amount of NWMLS IT resources regardless if they serve only one member or ten members. Typically, a vendor only downloads the NWMLS data once, and uses the same copy of the NWMLS database for all their clients. It’s not like a vendor who has 10 clients incurs 10 times the CPU & bandwidth costs that a smaller vendor does.

Allowing multiple feed per broker could encourage more competition between vendors, but increasing vendor costs certainly won’t make things cheaper for members in the long run.

I can see a future phone call from the NWMLS enforcement division going something like this…

I know what you’re thinking, punk. You’re thinking “Did I sign six download agreements or only five?” Well to tell you the truth, in all this excitement I kind of lost track myself. But being as this is the NWMLS, the most powerful MLS in the greater Puget Sound area, and could blow your web site clean off, you’ve got to ask yourself one question: Do I feel lucky? Well, do ya, punk?

Has anybody else heard any details on these new policy changes? Do you know what the new IDX feed fees are for? Do you think the repeal of the download rule will help you? Do other MLS’s do this kind of thing? Why do I feel like I forgot my fortune cookie and it says I’m {bleep} out of luck?

Short Sales and REOs to Finally Become a Search Field in the NWMLS

Courtney Cooper broke the news on Easter.¬† The Northwest MLS has voted to add a required field:¬†“Third¬†Party Approval Required” and “Bank/REO Owned.” From the¬†NWMLS (no link):¬†
 
“NWMLS is excited to announce two new required fields; ‚Äú3rd Party Approval Required

How to Find Short Sales in the MLS

It’s important for real estate agents to track the percentage of listings where the homeowner is in financial distress as well as REOs (real estate owned), compared to the overall number of listings in a given market area. When short sales, pre-foreclosures, and bank-owned property make up a larger percentage of the overall available number of homes for sale, this has a downward effect on home values in that area. Yes, neighbordhood to neighborhood there “may” not be any short sales or bank-owned listings…today.¬† However,¬†we are¬†on an upward trend with foreclosures and watching what’s ahead can help home sellers make good decisions about how to choose a more agressive listing price if they are truly motivated to sell. We’ve done some research in the past on this. Galen wrote a post about search terms that work on Estately.¬†¬†A few months ago¬†I taught a Short Sale class in Snohomish County and an agent remarked that he had a buyer in a specific price range, I believe it was between $200K and $250K and he was looking for home in Everett, North to Marysville. He said ALL the listings in that price range and area were short sales with only one exception. Yikes! More short sales and bank-owned REOs mean more downward pressure on home values as the short sales that don’t close turn in to REOs and banks bring more and more REOs on the market. At this time, searching for short sales is not an option on the public-side MLS (Multiple Listing Service) per rule. Perhaps this is because the commission is paid by the seller and many believe it’s not in the sellers best interest to disclose¬†the short sale status because that may draw low-ball offers. Now that we’re in a buyer’s market, perhaps home sellers and voting members of the MLS rules board would see that it’s in everyone’s best interest to attract the right kind of buyer. Investors have poured into California¬†scooping up low end REOs because the sales price is low enough to allow for the home to be rented for enough to cover the mortgage payment long term. At some point, when Seattle area prices are more in line with rents, investors will want to search for short sales and REOs here.¬†¬† Until then, by doing keyword searches we can also keep track of possible “ghost inventory” (REOs being held¬†off the market¬†by the banks) making an appearance here in the Seattle market.¬†

Here are some possible short sale and REO search terms to use besides just “short sale” and “REO.”

foreclosure
preforeclosure
pre-foreclosure
short payoff
motivated seller
subject to lender approval
bank approval needed

bank owned
corporate seller
corporate owner
vacant
no repairs
fixer
instant equity

What search terms should we add to the list?