Where's the Beef?

In my last post, I awoken Ardell from her winter hibernation. To which I feel I should both apologize and take the credit . Ardell raised many interesting points, that I feel that merit a response. First and foremost, I’ll admit I am somewhat biased, since I tend to view things through buyer-colored glasses and I overlooked the reasons why a seller might be less than completely forthcoming with their listing information.

Where's The Beef?Admittedly, my gripe about bad zip codes is pretty minor (less than 1% listings are affected). However, entering an incorrect zip code is like misspelling a street name, it just shows buyers a lack of attention to detail. If I’m a buyer looking for vacant land in an Issaquah zip code (98029), I don’t want to see listings in Bellingham. If I’m looking for rental property in a Redmond zip code (98052), I don’t want to see listings in Mercer Island.

Regarding my beef about school information; since only half the schools surrounding Lake Washington are above average, are only half are listed? I wonder if the MLS near Lake Wobegon has this problem? Besides, who makes the decision that the school that serves a property is bad? The buyer might think XYZ school district is great, but because the seller had a differing opinion (and didn’t disclose that information), they just lost a potential buyer who won’t bother looking at a property that they otherwise might have.

Regarding my beef about latitudes and longitudes; OK, you the agent have no control over this. It still doesn’t explain why the MLS does such a bad job of geocoding! Admittedly, most people probably don’t care (unless they use a computer). Unfortunately, since many people use computers to find property information (and that number is only increasing), it’s a problem that will only become more noticeable.

When you combine latitudes and longitudes with free digital maps and inexpensive computer databases, you can see the location of listings in the neighborhood and other points of interest with an ease that was impossible to do (or at least very expensive) only a few short years ago. As they say, the 3 most important words in real estate are “Location, Location, & Location”, which means the most important part of a real estate listing web site is going to be “Maps, Maps & Maps” (as you can see by the growth of map-based real estate listings web sites this past year). Not having accurate latitudes and longitudes, makes it harder for software engineers to develop features the real estate buying, real estate selling, & internet surfing public increasingly are going to demand.

Pop quiz, which house is the better value? This ~$800K house or this ~$800K house? Without knowing how much living space I’m getting for my $800K, it makes my job as a buyer more difficult.

Just because you can’t get an exact measurement, doesn’t mean you shouldn’t measure. Most real estate listings & transactions have more legal paperwork & disclaimers than a Microsoft EULA! Furthermore, the NWMLS has the source for the square footage information associated with a listing. Couldn’t an agent argue the source should be liable? I assume the agent pays only pays if the error was in the sellers favor? Otherwise, isn’t listing a property with 0 square footage is asking for a lawsuit? Granted, I’m not an attorney, but if the risk was meaningful, I’d suspect all properties would have a square foot value of 0! So, if you get 3 different answers, pick the lowest value! Throw out the measurements from the French & Russian judges! Inaccurate data is always better than no data (at least for buyers).

Lastly, as computer based listing search & analysis tools become easier to use and more sophisticated, bad data is only going to be easier & easier to spot and less & less tolerated. Missing data makes the buyers job harder. Perhaps ironically, it also makes the sellers job more difficult as well. How can you draft an accurate competitive market analysis report if you don’t know what the size of your competitors are / were? Sure an agent could do the extra leg work of looking at the county records, but it’ll cost you more time (and time is money).

I guess the moral of this post, is caveat emptor. Although buyers may want to trust MLS data, sellers have a motivation to give you a reason not to. Perhaps, there is a market for a CarFax like service, that provides better MLS data, than the MLS? Despite my complaining, none of these obstacles are going to stop software engineers from giving the internet home buying public what they want (complete & accurate listing data). The internet has given the buyer more knowledge & more power in the marketplace. Sellers (& their agents) would be wise to embrace this trend, instead of avoiding it.

Caffeinated Software

PS – This blog posting information is not warranted. Reader should verify all information to their satisfaction. Information is based on data available to the poster, including county records. The information has not been verified by the poster and should be verified by the reader. To the maximum extent permitted by applicable law, in no event shall the poster (Robbie), Caffeinated Software, or its suppliers be liable for any special, incidental, punitive, indirect, or consequential damages whatsoever (including, but not limited to, damages for loss of profits or confidential or other information, for business interruption, for personal injury, for loss of privacy, for failure to meet any duty including of good faith or of reasonable care, for negligence, and for any other pecuniary or other loss whatsoever) arising out of or in any way related to the use of or inability to use this blog post.

38 thoughts on “Where's the Beef?

  1. LOL Woke me up? I don’t think anyone can suggest that I have been asleep in the short time I have been around Rain City, which to date has been less than ten (10) days. “Winter Hibernation”? I’ve been working 24/7 straight through since GKW, including Christmas Day and New Year’s Day. No Hibernation for me, that’s for sure.

    In order to search “the mls” we, the members of the mls, use several tools simultaneously so that nothing slips “between the cracks”. We use a map search and surround the area in a big block and ask for everything in the block. We use a radius search and define how far (1/4 mile, 1/2 mile, etc…) around the listing number we wish to “see”. We use a price by city search so as not to miss properties that are not “mapping friendly”. We use several other means to search for our cleints and rarely, if ever, do we use a zip code search…almost never, and never solely, as the means to locate property for our clients.

    So what may seem mega important to you and negligent on our part, may be of no consequence to the members of the mls, for whom the data is provided. In fact, quite the opposite. The industry as a whole may in the future reduce the required fields and fill out none of the non-required fields, so as to give the public “an advertisment” version of the “data”. Or we may run two separate systems of mls data, one available to LIBB members and one for non-LIBB members.

    Providing the means to view property to the public at large, was never intended to be completely “accurate” and “complete”. It was to give the public a general idea of what they might be able to buy (the original Realtor.com concept). In fact many listings on a national scale do not appear there and many that are there are already “sold”. Same is true for the local sites that you, as a consumer, can access.

    The mls is not what you think it is, and we don’t necessarily want to make it what you want it to be.

    Why should we embrace “the trend”, Robbie? Can you please explain that to me? Why should we make it easier, instead of harder, for the public to use our internal system in order to cut us out of the picture entirely? I’m confused there. Can you help me out?

  2. BTW, Robbie,

    “Caveat Emptor” went out with with Clinton. Or was that Reagan?

    The information given to the buyer’s agent of the actual buyer of the property, is a lot different and more all inclusive, than what the general public gets to see, and rightly so. Timing is everything!

    Given the recent popularity of glasses these days, you may want to have a couple of pairs. Try a seller-colored pair on once in a while. The combination of buyer-colored glasses and seller-colored glasses may give you a different and well-rounded perspective.

    There are two consumers in every transaction after all, and every buyer is potentially tomorrow’s seller. Best we keep everyone’s best-interest in mind, don’t you think?

    Sadly, I must confess, that you are indeed correct. Given the fact that the “data-collector” is not “a party to the transaction”, we often put but the best interest of our buyer and/or seller clients ahead of the general public at large, you included. Mea Culpa, Mea Culpa .

  3. Ardell,

    To your question:
    “Why should we make it easier, instead of harder, for the public to use our internal system in order to cut us out of the picture entirely?”

    I’m thinking that the answer is quite simple. If real estate agents don’t make it easier for the general public to use their system, then someone else will.

    With all the new tools that are being released (and there are many more on the way), the real estate public (both buyers and sellers) are going to continue to expect more data (and more accurate data).

    This access to data issue reminds me of the phrase “keep your friends close, but your enemy’s closer”. Open data could be the enemy of real estate agents everywhere, which is all the more reason that agents should embrace this technology so as to have a chance to influence how it is developed and used.

  4. The seller wants you to know about the very best he has to offer. The seller wants to advertise that which will entice you to come and see the property for yourself.

    Once you get there you may just find that the 10 X 10 purple room that caused to to scroll away from his home on the internet, was not only not his best feature, but insignificant in your home buying decision process.

    Sellers have a lot to lose if agents do not use the internet wisely. And putting “everything out there” is not always wise.

  5. Ardell,

    I agree with you that a seller expects a real estate agent to highlight the very best features of a home and in that sense “putting everything out there” is not always a wise idea…

    But the seller I’m considering is one step back… I’m thinking of sellers before they are clients. These are people who are current home owners and want as much information as possible about the value of their home (for many, this is their single largest asset!). This includes many of the readers of Rain City Guide who visit simple to gauge the local real estate market. (I can tell you from watching my stats, that when I post something that gives statistics on home prices in Seattle, the hits go up substantially!).

    Sellers (before they hit the MLS) want information. Sites like ShackPrices now offer comprehensive home sale data (for free!)… These types of sites are only going to increase (with even better data) in the future… and I think it would be a shame for real estate agents to lose these clients to other systems (FSBO, Zillow?) long BEFORE they even become clients. In other words, by giving them an extended exposure to other systems, they are likely to be convinced that they don’t have to use an agent.

    While I know and agree that data is quite powerful, I’m of the opinion that holding onto too much data (or worse, filling in wrong data) may be in the collective, short-term, best-interest of agents, it will come back to harm agents in the long-term.

  6. I think that the real estate business is probably going to undergo a revolution similar to what the financial services business has undergone during the past 10 years.

    Remember when stock quotes were a day old and printed in the newspaper? Remember when stock purchase commissions were $300 or more? Remember when if you wanted historical price data, you had to go to CompuServe or go to a broker and pay for that data?

    Today, newspapers are dropping the stock prices from the business section of their papers, I can get an instant stock quote for free, buy 100 shares for under $10, and get gigabytes of historical price data for free. Despite this sea-change, Wall Street is still humming along. Why?

    Now the internet didn’t destroy Merrell Lynch and the other full service brokerages (although it did require them to adjust their business model). It did require that the old guard brokerage realize 2 very important points.

    1) Data != Knowledge. Just because you have a lot data, it doesn’t necessarily make you smarter (although it does help). A lot of investors lost their shirts during the recent tech bubble. One would think with all this free data that this wouldn’t have happened, but it did anyway. Hopefully the clients of full service brokerages were well served when their advisor’s told their clients to migrate into more defensive investments before the blood bath begun.

    2) Value is created when an advisor tells the customer why they should purchase and when they should sell a financial product (and the customer makes money by using that knowledge). Selling stock & providing data are just necessary elements to make the value creation process happen. But, they aren’t the only elements or even the most important elements in the value creation process.

    Now, let’s look what a full service realtor can do in this brave new world. When I moved last year, I dealt with a full service realtor. The realtor I dealt with helped me stage my old house and sold it. Using her market knowledge and her staging skills, I was able to sell my house in only 2 days for 8% more than my neighbors were asking for their homes!

    She also used her relationship with mortgage professionals to help us come up with the $20K in earnest money we needed to buy our new house from the builders (in under 48 hours no less)!

    Now, was she expensive? Yeah! Was she worth the price of her commission? I’d say so.

    The realtors that provide good service & value for their clients will do well, just as they always have. The realtors that just provide data will be looking for new jobs.

    The financial services industry appears to have evolved into full service, discount/partial service, and no service/all data models. I believe the real estate industry will eventually behave the same.

  7. Nice comeback, Robbie. You look a lot better without the maid outfit on 🙂

    There are buyers who don’t need anything except someone to write up a contract because they are buying a house in their neighborhood they’ve been in 100 times as a guest. And there are sellers who don’t need much help as well. I’m all for people being able to get only what they need and being able to negotiate different options with any agent. Like I said, we’ll go from the ground floor to the top as long as the situation fits. More on that later.

    My concern is if the companies with agents who “get it” won’t allow their agents to be fair pricewise with the consumer, then the consumer is stuck with the strange scenarios that are popping up.

    We’ll have techies handing out keyboxes and never coming back until it’s time to take the keybox off, while sellers stare at contracts handed to them by the buyer’s agent. “Oh, where did it say the buyer wanted $6,000 toward closing costs? Six pages down on page 2 of the finance addendum? I signed that?” Where’s that guy that rented me the keybox? What’s he have to say about all this?”

    And we’ll have “door openers” with shiney new keybads who buy warm bodies from the “find an agent button” websites letting buyers in every house playing russian roulette saying “Do you want to buy THIS one?” at every door he opens. Then he’ll write up offers that won’t close because the “door opener” didn’t know the buyer expected him to write in that the seller was going to pay the closing costs. Closing comes around and the buyer doesn’t have the closing cost money because everyone forget to talk about that.

    Meanwhile the seller is thinking his house is sold and moving his stuff on to the truck to go to a new house he now can’t buy because his house can’t close.

    I don’t think the answer is new companies springing up with no frills options that will leave a lot of good people stranded. I think the good agents need to get more real and buyers and sellers who do need it all done for them need to be honest about their needs and abilities in that regard, and we have to meet in the middle somewhere.

  8. I think the good agents need to get more real and buyers and sellers who do need it all done for them need to be honest about their needs and abilities in that regard, and we have to meet in the middle somewhere.

    I like that, in theory. Where the theory falls apart, I think, is with people’s self-awareness and expectations. There are far too few “good agents” and many consumers (and Realtors) believe that they are more competent than they are.

    If what you say might happen does, with the “door openers,” etc, what should the agents who “get it” do? I will continue to fight for my commission at every opportunity, frankly, because I earn it. Not to hijack this thread, but our industry (and its lobbyists/leadership) needs to evaluate what its primary goal is – to have as many members (and therefore power/clout) or fewer members who are more professional and therefore more accountable to themselves, their companies and by far most importantly, their clients.

    My two cents.

  9. Great thread guys and gals!!

    Jim… You are dead on.

    Ardell, You are right about these comment:

    Why should we embrace “the trend

  10. Well Jim so far it looks like you might be part of the problem instead of part of the solution. You say you agree that “good agents need to ger more real” but you also say “I fight for my commission at every opportunity, frankly because I earn it”. Let’s “get real” for a minute. No two transactions are the same. There has to be variance there where in one you more than earn it, and the other that was easy is compensating for that.

    I am working up five real life commission and transaction scenarios. I’m bringing them in as a new “thread” called Real Estate Commissions.

    Let’s see if we can’t, by using “real” case history and commissions paid for each, figure out the true right answer that both we as agents and the buyer and seller colored glasses wearers can all agree on. Let’s start looking for that right answer that no one dares to talk about. The one where a consumer gets a more than adequate agent for a fair price. Let me do the scenarios as we can’t use % and I know the fine line between meaningful chatting and “price fixing”. I’ve got 5 sceanrios about ready to post.

    This “good” agents want it all leaving the consumer with less than adequate options has got to stop. Let’s find out where the meeting point is…are you game to at least talk about it? Or are you going to “keep fighting for that % that is SUPPOSED to be fair across the board no matter how easy the deal is and whether the sale price is $150,000 or $750,000? Or are you just going to say “We aren’t allowed to talk about that”?

    Could be interesting.

  11. Giles, I think you missed the part where the SELLER is ALSO owed the duty of fiduciary services, and giving it all out up front instead of timing the release is against the Code with regard to what duties the seller is owed. If the data field is not required by mls to be filled in and it doesn’t help the seller for me to fill it in, then I release that info on a “need to know” basis to the actual buyer and not the public at large. If you were a seller, you would agree with me. If you are THE buyer of that house, you will get the info. To splatter it across the internet is the issue at hand…who does that serve? Which of my clients are best served by showing all of my cards before the game gets started?

    BTW, fiduciary duties are owed because of the Washington State Law of Agency, not a NAR or WAR code. All licensees in the state of Washington owe the duty of fiduciary services. Now tell me how MLS ONLY at $595 entitles a consumer to that level of service?

  12. I am all for an open discussion, so long as we tread lightly on the anti-trust tightrope.

    One of the better solutions I have seen is Merv’s; I just have not made the time to learn more.

    The industry is changing; I think that one key component that is often neglected is the consumers’/public’s “perception -vs- reality” of the amount of work that a good agent does, both behind and in front of the scenes.

    Better agents deserve better pay.

    As information is diffused much more widely, the industry will have to change; how is the key. I don’t think the public is ready …

    This should be fun.

    P.S. NAR says this:

    The obligations of the Code of Ethics in respect of real estate disciplines other than appraisal shall be interpreted and applied in accordance with the standards of competence and practice which clients and the public reasonably require to protect their rights and interests considering the complexity of the transaction, the availability of expert assistance, and, where the REALTOR® is an agent or subagent, the obligations of a fiduciary. (Adopted 1/95)

    Me, I tend to be more simplistic; something is either right or wrong.

  13. I’m excellent at walking the anti-trust tightrope, as it is the only means to a meaningful exchange. Mr. Hawaii there has broken every rule inthe book on his blog, so let’s not go there with him 🙂

  14. Ardell,

    I think you confused what i was saying… or most likely my poor literary skills weren’t able to get my point across.

    My point is that it is the listing agents fiduciary duty (like you said under state law & NAR ethics codes) TO spread the data far and wide so there will be more info for the buyers to use and see about their houses. Now in terms of not showing a picture of a bedroom that has huge holes in the carpet or something like that… well i agree with you… some things are best left not said.

    My beef is on a bigger level in terms of overall data sharing with the policies of MLS’s across the country. And my point was the MAIN reason they aren’t sharing very much of the data is to protect the brokers (who make up the boards of the MLS’S) cut of their buyers agents. In my mind this has got to be the overwhelming reason. I mean it is half of their income!!!

    I keep explaining this to people in this debate…and they move on or get distracted… but i just cant let it go… THIS IS THE REASON…

    hahaaa at least I’m pretty sure 🙂

  15. Giles “So to say I want to provide watered down data to the public and keep my listing agents data away from everyone but my buyers agents here at my brokerage”

    For the record, I did not say that, nor would I do that. If the seller has a red carpet in one tiny room, I do not put that on the internet photos. That doesn’t mean I am concealing it from buyers who come to the house. The internet is an advertising tool, not a “disclosure format. Same with data. We have required fields and non-required fields. I am not going to fill in the “red carpet” data to post on the internet if it is not a required field.

    That is my fiduciary duty to the seller. Not to conceal it from buyers who make offers on his home, yet at the same time not to put on the internet every single detail. The internet posting is a Highlight Sheet, not a Form 17.

    When I am the buyer’s agent I DO NOT rely on mls data to represent my buyer client well. I understand that is put there by someone who represents ONLY the seller. Data is input by the seller’s representative. Buyer Agents and Buyers need to know that their “due diligence” doesn’t end at reading data input by the seller’s agent.

    Please try to think of BOTH consumers rights please. The seller is a consumer with rights also!

  16. Ardell,

    I agree with what you are saying about the red carpet…. I will quote from my last post.
    “Now in terms of not showing a picture of a bedroom that has huge holes in the carpet or something like that… well i agree with you… some things are best left not said.
    My beef is on a bigger level in terms of overall data sharing with the policies of MLS’s across the country. And my point was… the MAIN reason they aren’t sharing very much of the data is to protect the brokers (who make up the boards of the MLS’S) cut from their buyers agents. In my mind this has got to be the overwhelming reason.”

    So once again… like i had stated before… everyone reads my main point then move on to some different point in the MLS debate…

    I know and fully understand what you are saying about buyers agents knowing the MLS data is just data provided buy someone who has a fiduciary relationship with the seller…

    it is with the lack of the overall sharing of the data… in any form by the brokers…

    sorry to keep going back to my same points… but i just think that everyone is overlooking the obvious reason for the MLS debate because it is so simple… brokers are protecting the advantage their buyers agents have by having the full MLS data.

    I give up on this subject..hahaha

  17. Pingback: Blog Wayback – Future of Realtor.com, etc. | Real Central VA

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