Category Archives: Investing

Real estate search sites hit data control sore spot

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Inman news had an interesting article today about how some of the innovative real estate search sites are causing headaches across the country. Considering all the conversations on Rain City Guide recently about the future of “data” this seems quite relevant and is a very interesting read. However, Inman will make the article subscriber-only after today, so catch it fast if you’re not a subscriber (or just read below for some of the more interesting quotes):

Out of companies that have released real estate search tools, the two most interesting (to me) are definitely Trulia and PropSmart. (The Inman article also features some background on Oodle, but they don’t seem to have the laser-like focus on real estate like the other two)

Here is Ron Hornbaker of PropSmart view of the situation:

While (Ron) said the response to Propsmart has been mostly positive from agents and brokers, he has received a bit of pushback from a few people in the multiple listing service community. “First of all, they’re using the word ‘illegal’ and … ‘copyright infringement.’ I’ve just been polite and talked to them. We don’t want to do anything people don’t want us to do.” Hornbaker said he has complied with the wishes of industry professionals who wish to remove their listings from being included at the site.

“My concern is they are speaking for way more interest than they should be. I do not believe we are a Napster-like model, and that’s what we’re being equated to,” he said, referring to Napster’s past problems in offering up a service that allowed users to illegally download music. “I would ask the people who say we’re doing illegal things to point out where the harm is — who are we damaging?”

That last quote would be sure to get a few comments from concerned agents should Ron have posted it on a blog… 🙂

The property listings displayed at Propsmart, he said, “are being used simply for display to consumers to point them to a home for sale. I would think that the opposite side of this could be argued more effectively: By restricting consumer access to the listings, that has more (potential) for being illegal.

“I believe it’s the seller who’s being forgotten in this situation. It is the seller we’re trying to stand up for and do the right thing for,” Hornbaker said, adding that sellers may not be aware — and may not approve — of efforts by brokers to block the listing from being viewed on some Web sites.

“I don’t buy the ‘copyright infringement’ for a second. They see their old model slipping away and they’re grasping at what they can,” he added. “We’re not trying to make money from the brokers. We’re not a middleman. We’re just trying to be a useful tool for consumers. I think this is going to backfire on the (opponents) in time.”

The gang at Trulia also gave some background on their view of where Trulia fits into the big picture:

Sami Inkinen, COO and co-founder at Trulia, said the site’s development team made a concerted effort to bring brokers to the table. “Most importantly, even before we launched we talked to all of the key brokers in advance to make sure the product was acceptable to what they want.” Inkinen said that Trulia is also careful not to access IDX, or Internet Data Exchange property listings information that is protected through broker agreements with MLSs.

While brokers seem to get it, Trulia CEO and co-founder Pete Flint said MLS’s are “frankly a mixed bag. Some of them have yet to understand … that this is in the best interest of their members. Some of them are not friends of innovation. Really what we’re focused on for now … (is) communicating how search is really positive to the real estate industry.”

Inkinen said, “We understand who we’re serving and we’re serving the brokers. We don’t want to own content. Our motto has always been the search-engine approach, the search-engine model — help brokers to place the digital yard sign on the Internet and then point to the actual source.”

Flint added, “We’re very aware that listings are a very delicate matter. We’re not looking to reinvent the industry in any way. We’re trying to improve things a little bit for consumers, and … a little bit for brokers.”

(Thanks to Jim of Central Virginia Real Estate News for tipping me off about this interesting article)

Where's the Beef?

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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.

Robbie
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.

Radcribs Stealing Trulia Code for their Real Estate Search?

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I received this email from a Rain City Guide reader this morning:

Radcribs had to take down its NYC real estate mashup. Radcribs basically copied every bit of its code from Trulia (all the javascript, all the CSS for layouts, all the HTML templates, etc). Trulia’s lawyers made short work of that. You’ll see that Radcribs is back to just providing what is basically a ripoff of PropertyShark’s service. (PropertyShark actually had to file suit against Radcribs for copyright infringement to get Radcribs to back off.)

Like the top-notch investigative reporter that I am ;), I was able to confirm that Radcribs was stealing appeared to be copying code from Trulia from a very good source who I’ll leave anonymous.

Without a doubt, I’m going to take RadCribs (and CityCribs, which appears to be run by the same people) down from my list of Innovative real estate search tools since they don’t seem to be doing much innovation.

If I hear anything else interesting about this story, I’ll be sure to report it!

UPDATE: Based on some feedback from my source, I decided to tone down the assertion a bit since I may have been overzealous in my reporting…

Garbage In = Busy Maids (Cleaning up the MLS mess)

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On the soapboxAs promised in my previous post, I’d like to get on my soap box and complain about the state of NWMLS data. As an application developer, I’d rather spend my time developing new & exiting ways of visualizing data instead of developing new & exiting ways of correcting inaccurate data. Unfortunately, in order to accomplish the former, a lot of effort is spent on the later.

For example, of the 20,376 properties that were in the database when I started writing this blog entry, 32 have bogus zip codes. I’m not talking about hard to find errors like a Sammamish property with an Issaquah zip code. I’m talking about outright typos and easy to catch errors. Zip codes like 00000, WA, and other obvious errors, like zip codes smaller than 98001 (which is the smallest zip code in Washington state).

Another bone of contention, is that nearly 7% of the properties in the NWMLS database have a square footage of 0 square feet (1,389 properties). How hard is it to contact the county assessor’s office or the property owner and get the number? Can’t you just give an intelligent guess? Needless to say, this complicates compiling price per square foot statistics because computers have this thing about not wanting to divide a number by zero.

Even more annoying, nearly 18% of the properties in the NWMLS database have a 0° north latitude & 0° west longitude (3,637 properties). Can’t you just go to a map web site and enter an intelligent guess? If you can afford to be a competitive realtor, you can afford a cheap GPS receiver to put accurate data into the MLS when you list a property. I’m sorry, but you if you say your client’s property is located in middle of the Atlantic, 350 miles off the coast of Accra, Ghana in Western Africa, why should I believe anything else in your listing?

Perhaps most disappointing is that over 50% of the properties in the database don’t have elementary school, junior high, or high school information associated with the listing (10,419 properties)! How is a client supposed to make an intelligent decisions on the quality of schools, if that information isn’t available? I can only imagine how frustrated professional realtors must feel about this since their livelihood is dependent on the quality of this data!

Now, given the frequency of these errors, it astounds me that I have yet to find an instance in which a county, city or community name was misspelled. So obviously, it is possible to have high quality data in the database. But why is only some of it of consistently high quality? And why do we have so many errors of commission?

To paraphrase one of Murphy’s Law “If builders built buildings, the way the local MLS (and local realtors) compile data, the first woodpecker would’ve destroyed civilization“. Why is the data so bad? Are some realtors too lazy to bother with listing a property with complete and accurate information? Does the MLS not care about this? Are the MLS data collection tools so bad, that the fact we have any data (much less accurate data) is a feat worth celebrating? Perhaps most importantly, what can we do to improve this sad state of affairs? To quote General Beringer, from the movie WarGames “I’d piss on a spark plug if I thought it’d do any good!”

Robbie
Caffeinated Software

PS – Go Seahawks!

Zillow fans, meet your new blog

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Blog of Spencer Rascoff, employee of Zillow. Today’s post gives out (already available) information about Zillow. They’ve raised $32 million. It sounds like they’re settling in on a business model: Zillow’s 75 employees (mostly engineers) will manage to get the beta version out within the next 6 months. The comparison of Zillow to Hotwire is also very informative.

-Galen
ShackPrices.com

Is it bad if everyone else does it too? What if you're one of the best?

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Realtors are the subject of another balanced-but-critical New York Times article today. This time it’s for a whole host of lobbying-related fair market-blocking activities.

Frankly, I don’t have a lot of sympathy for banks, but the strong-arm tactics of the National Association of Realtors described in the article make banks look like victims of injustice. The story meanders away from bank-blocking tactics to easier to explain subjects, like the federal suit brought against the National Association of Realtors for locking low-cost realtors out of many listings. It appears the government (a very pro-business administration, at that) wants to create a level playing field:

When the suit was filed, J. Bruce McDonald, a deputy assistant attorney general, said, “Our job is to ensure that one group of competitors doesn’t tell some of its members they can’t compete in a certain way and undercut the level playing field.”

The defense:

Ms. Janik warns that major changes to the multiple listing services could cause large nationwide brokerages to pull out of the system and establish their own private listings. That, she said, would be a far greater threat to small firms.

So what’s the story? As I understand it, the progressive (egads!) North West MLS does not allow brokers to selectively block listings from competitors sites, which is what the realtors say they have a right to do. And, as far as I can tell, Windermere and the other monsters still list their houses with the NWMLS. Why? Because listing on the MLS allows way more potential buyers to see their houses and, sorry FSBO lovers and separate MLS creators, having more potential buyers increases the speed and price at which your home sells. Also, it would be extraordinarily two-faced if they first said “don’t do For Sale By Owner (FSBO) because you won’t get the exposure that you would get with a full-service brokerage” and then said “list with us even though only we’re going to intentionally reduce the visibility of your property to only buyers who talk to our agents.”

If anything, the Justice Department’s suit should keep realtors in business longer. If the system is open just enough that innovators and alternative pricing models will use it, they keep people in the fold and maintain some pricing power. If the system is locked down, innovators will tend to create MLS replacements systems until one of them succeeds.

Realtors: a PR campaign is in order. Your organization is blocking open markets left and right in order to enforce a 5-6% commission structure. The reputation of the National Association of Realtors is headed toward car salesman and lobbyist territory and when other folks find themselves having monopoly-like pricing power, they spend some of that money on goodwill (see: Microsoft). When other organizations find themselves in this making lots of money, not very popular pickle (for good reasons or bad), they also advertise on NPR (see: ADM, Exxon, Walmart).

On a side note, why haven’t I heard of the sell-your-home-get-a-Toyota model?

“Because the industry functions as a cartel, it is able to overcharge consumers tens of billions of dollars a year,” said Stephen Brobeck, the federation’s executive director. “Consumers are increasingly wondering why they are often charged more to sell a home than to purchase a new car.”

-Galen
ShackPrices.com

Should You Leverage Your Home or Pay it Down Rapidly?

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There is a great debate within the inner-mortgage circles these days. Should we, as loan professionals, encourage clients to borrow as much money as possible? Or would consumers benefit more if we helped them to understand the advantages of 15-year amortization schedules and pre-paying principal? Let’s examine the pros and cons of both strategies.


Leveraging Your Property. In order to understand why you’d want to borrow as much as possible for your home purchase, you must first grasp the concept that equity has a zero rate of return. Here’s an example:

If Consumer “A” buys a home for $300,000, and puts 20% down, then they have $60,000 in equity. Over the next 5 years, the property appreciates $100,000 in value. Consumer “A” now has $160,000 in equity.

Consumer “B” buys a home for $300,000, and puts no money down. At the end of 5 years, that same home is now worth $400,000. Consumer “B” has $100,000 in equity, which is the same appreciation as Consumer “A”, a net $100,000.

As you can see, your down payment has nothing to do with your rate of return. What becomes important is how you choose to manage the $60,000 you didn’t use as a down payment. If you use it for frivolous activities, such as buying toys or going to Las Vegas, it would be more prudent for you to use that money as a down payment. Especially since this will enable you to obtain a lower interest rate.

However, if you were to invest the $60,000 in a vehicle that can out-earn the cost of that debt, then this could be a formula for success. This is why some lending professionals suggest putting as little down as you possibly can, maximizing your tax write-off, and investing the rest. This principle has been applied for many years in the life insurance game. The old saying goes, “Buy term and invest the rest.” The key component is taking the money you would have used as a down payment and creating an asset accumulation account. This account should earn a significant enough rate of return to enable you to pay your mortgage off entirely and achieve the ultimate goal of being debt-free.

Paying Your Home Down Rapidly. There are very few times over the course of my career that I have seen a client with zero debt and no financial difficulties. Choosing to pay off all of your debt can reduce stress and help you to gain freedom of cash flow for investment opportunities. A 15-year mortgage or a bi-weekly payment strategy provides structure. It can also put you on track to have your mortgage paid off within a set timeframe. Simply put, it contains built-in discipline.

It’s important, however, to understand that regardless of how rapidly you pay your home off, you’re not getting any greater rate of return on your investment than if you paid it off slowly.

Conclusion. So how does one determine which scenario is best? The choice depends entirely upon the individual. Savvy consumers who are disciplined, and are comfortable taking chances from an investment perspective, would do well with the first scenario. Over the course of time, it’s been proven that your rate of return over the long-haul will be far greater than the rate you’d pay for a mortgage in today’s rate environment. It’s important to seek the advice of a skilled investment advisor to ensure success with this strategy.

The second scenario is best for those who have a difficult time managing their money or who’ll sleep easier at night knowing they have a plan in place to pay their loan off more rapidly. Be sure that your budget can handle accelerated payments. When consumers “bite off more than they can chew” with a 15-year mortgage, they frequently end up having to refinance back into a 30-year schedule.

If you find this subject intriguing and would like to know more, I recommend that you read a book titled, Missed Fortune 101, by Douglas Andrew. It’s an outstanding read that is very simplistic and goes into far greater detail than I can cover in this column. Douglas is a financial planner who advises safe-structured investments such as whole life policies and tax-free fixed income instruments.

The Joys of Geocoding

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In my last post, I was asked what the accuracy of the locations in our generated Google Earth files are. Before I divulge that information, I’d like to explain some of the challenges of getting accurately geocoded data. (I’ll get on my soapbox and complain about the state of NWMLS data in my next post).

GPS Signal WiggleNow, in partial defense of realtors and the MLS, it is unrealistic to expect perfect data. For example, consumer-level GPS receivers aren’t always as accurate as one might think. This weekend I loaded up Microsoft Streets & Tips 2006 on my desktop computer, hooked up my GPS receiver, turned on GPS tracking , created a GPS trail, and walked away for an hour. An hour later, my map had a line drawing that resembled the type my 3 year old son likes to create. So even if a realtor was to use a GPS receiver, to get a latitude & longitude reading, it’s entirely possible that the measurement would be off by a house or two (or four).

Another problem, is that most digital maps are created with data sold by companies like TeleAtlas or NavTeq. The companies compile their data by driving around previously unknown streets & neighborhoods, with computers & GPS receivers (kinda like how that annoying guy in the Verizon ads, test their network). I should note that in-vehicle navigation systems are more accurate than GPS receivers alone, because the vehicle’s navigation system can also use the vehicle’s steeling wheel position and the speedometer to determine what your location is.

Unfortunately, by the time the Microsoft’s, Yahoo’s and Google’s of the world get their hands on the data, it is at least 3-6 months out of date (and probably closer to 12-18 months out of date by the time it gets on the web or published on a CD). This is a problem because about 25% of the properties in the NWMLS are new construction (where new construction is defined as a property that was built in 2005 or later). Since new construction is often located near new roads, the giants of digital mapping may be unable to help and are always in a position of playing catch up.

Then when the companies convert the raw data into digital maps, they end up using multiple sources of data, and interpolating it into one set of data they are going to use for a map. However, the data sources don’t always agree on where a point of interest is.

For example, Google Earth thinks the top of the Seattle Space Needle is at 47.620367° north latitude & 122.349005° west longitude. Meanwhile, Microsoft’s Virtual Earth, seems to think it’s located at 47.620336° north latitude & 122.348515° west longitude. Now, a few ten thousand-enths of a degree means the difference between the tip of the needle & one of the air conditioning units on the roof (a few yards). But if they can’t agree on where the top of the Space Needle is, it’s likely they aren’t going to agree on where 742 Evergreen Terrace is either. However, a few yards of error is better than a few miles of error (which is what can happen when I use raw NWMLS data)

Because of this, I have to geocode every single property in the database because I don’t trust the NWMLS data. So I to call Yahoo! Maps Web Services – Geocoding API to get a latitude & longitude for everything. Although Yahoo is far from perfect, at least it’s free and try’s harder than the MLS. So without further delay, here is the current geocoding precision of the points on our generated maps.

Geocoding Precision No. of properties Percentage
address 16341 80.20
street 1975 9.69
zip+4 43 .21
zip+2 343 1.68
zip 1644 8.07
city 25 .12
state 5 .02

In closing, I’d like to ask real estate professionals to be as complete and as accurate as possible when submitting listing data to their local MLS. I’d also like to state even if the MLS was accurate, it’s unrealistic to expect prefect geo-coding from imperfect data. If digital mapping companies and GPS technology can’t get it exactly right, a house or two off, is probably as accurate as you can realistically hope for given the current state of the art.

Robbie
Caffeinated Software

John Cook Interviews Redfin CEO: Redfin is "crazy-good"

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Dustin pointed out that John Cook over at the Seattle PI just published an interesting interview of Redfin’s CEO, Glenn Kelman (Direct link to the mp3).

Before I jump in, I should point out that I run ShackPrices.com, a site that is faintly a Redfin competitor. That said, that both Redfin and ShackPrices are much more worried about our customers and competitors with lots of money than we are about each other. I’ll try my best to stay unbiased.

Up to this point, Dustin has been under the impression that Redfin is very insular (He’s even gone so far as to say “arrogant”). I get the impression that Redfin has some interesting technologies, but they are still looking for their path; Glenn is doing a big marketing push on a site that has only had cosmetic changes (to real estate buyers) in the last year. Throughout the interview he raves about his site. I think he says exciting ten times and “crazy-happy” or “crazy-love” at least three times. If you check Redfin.com, their news bar clearly shows that they’re on a marketing push (it also shows they still don’t have an interface person who can tell them to use that valuable space more effectively).

Glenn then talks about how addictive (crazy-addictive?) he finds the Redfin site. Personally, I get much more excited by the technologies behind PropSmart and Trulia. Those sites seem to have added to cool aerial photos with some real focus on the user interface. Redfin gives you great information about individual houses and even shows you the lot line, but it doesn’t give you any medium- to big-picture information. Neighborhood and city pricing information is worth much more than a single house’s historical sales (and this is coming from the dude who has only historical sales on his site).

I think it is interesting how an interview can really bring out the best and worst in somebody by just letting them talk. More articulately than anyone else I’ve heard from Redfin, Glenn describes the company’s lack of focus. For instance, he talks about how every state is different and national websites can’t accommodate that. Next, he talks about how he’s going to expand down the West Coast and all over the country. He talks about how cool the site is and how technology is changing, but gives digital photos of houses as an example of this trend (that was cool 5 years ago!). Even in vegan-city Seattle, I want to know where’s the meat to go with this fluff? When asked what’s driving traffic to Redfin, Glenn says “because it’s an awesome site.” I think I would have gone with “aerial imagery, property outlines and past sales data.” And if they don’t add to that list, they risk becoming just-another-mapping-site.

A while back, Anna wrote this article that showed how Redfin wants it both ways with real estate agents… and it is interesting that while Glenn is new to the staff (he started in September), he inarticulately describes this same conundrum that Redfin faces.

He says,

we’re not trying to serve the real estate agents… sell people out to real estate agents… what we’re trying to do instead is serve the consumer directly…

But when pressed by John about how Redfin makes money, he says

How do we make money now? People sign up for a real estate agent… The real estate agent and Redfin share the fruits of that.

Which essentially means “by selling customer names to agents.” I’ll give him credit – I hate the housevalues model and find it to be really sleazy and maybe there really is something to be said for waiting until someone requests an agent. However, they are not, as he says, “trying to do something totally different.” Redfin is just leaving more money on the table and, possibly generating higher-quality leads. I’m going to read into this, though, and say that they don’t plan on working with agents for long – note his question to himself “How do we make money now?”

Dustin says “it is not hard to read between the lines that he’d really like to squeeze those agents out of the business if only it wasn’t for those “great” relationships he’s built up with a few of them.” I agree. Late in the interview he emphasizes how he wants to balance the business model:

… balancing our business model. We’ve got real estate agents that are partners, that we still value enormously, but we want to make sure we keep the focus on the home buyer and seller who is the customer.”

Word to agents: now that we have funding, you are not a priority.

This is my favorite part:

If you walked into Redfin, all you would see are engineers and a customer support person.

-Galen
ShackPrices.com

The Future of MLS search is coming to Rain City Guide

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Greetings fellow Rain City Readers! I’m a software engineer that has been working with Dustin to develop a better MLS search. Before I get started into what I’m doing, I thought I’d discuss the why I’m doing it…

My saga began when I had the opportunity to develop an NWMLS search web site for a local realtor. After spending several weeks, cutting red tape, determining what forms I needed to fill out, figuring out whom at my realtor’s broker I needed to bother, signing my life away and finally getting access to an NWMLS database, I was at the point where I could get real work done. Anyway, after I had spent over 40 hours developing standard search features (search summary with thumbnails, property detail page) and a few interesting ones (like customized HTML e-mail with property photos, customizable photo not available photos on search results), I sent her my bill.

Then things went south. Despite the fact that my client was warned ahead of time that my time isn’t free, she apparently expected that I would be price competitive with “canned” solutions such as those offered by iHouse & Superlative. On the one hand, I can’t blame her. A consultant can’t compete with a commercial product, because a commercial product has a lot more customers to help finance its development than a lone consultant does. Just because those companies sell solutions for $50/month doesn’t mean it only costs them $50 to design, develop & test the software! It still costs those organizations thousands of dollars (or more) to bring these products to market! However, if you plan on distributing software to 1,000 customers, you can charge a lot less per customer, than if you are only distributing it to one.

Anyway, after this failed business opportunity, I decided to contact Dustin and regroup. I wanted to develop a unique MLS service that would’ve given my client a competitive advantage (and she was more interested in price than value) and after reading Rain City Guide it became obvious that Dustin would see the value in what I could do. Besides, I’d rather continue to improve the code I was working on than send it to the hard drive in the sky.

Dustin & I, both share the belief that the real estate industry is in for some very interesting times as the reverberations of the internet revolution continue to change our society and business models. Dustin’s enthusiasm for the ideas I’m trying implement is contagious and we essentially worked out a deal in which I’ll continue to develop compelling MLS technology in my spare time, I’ll use him and his Rain City readers as a sounding board for ideas and beta testers (both marketing & development feedback), and in a few months time, ideally, I would have developed a really unique service that technology savvy realtors would be willing to pay for.

One of the cooler things I’ve done is turn MLS search results in to Google Earth files. Just download the Google Earth application, visit our BETA listings search page, click on the Google Earth icon, and see your search results on a 3D globe. Eventually, we’ll do similar stuff with AJAX style Mapping (although, right now I’m focusing more on things that haven’t been done yet) and other applications.

Google Earth Application

Most realtors have “me too” & “same old thing” web sites. One of the things I want to do, is give realtors the ability of exploiting the MLS data in way that is valuable and compelling to their clients and strengthens & reinforces their name/brand to their prospects. Having customized RSS feeds of MLS data, having proximity searches to points of interest (how far is this house away from a gas station?), and take advantage of all the cool location/mapping technology that the 3 giants of the internet are developing (Microsoft, Google & Yahoo), are just some of the things that could be done, but aren’t really done yet.

One of the reasons for this state of affairs is that currently only software engineers with access to MLS data can do these things. Unfortunately, we live in world in which most realtors don’t have the skills & knowledge that software engineers have and most software engineers don’t have free access to the raw MLS data that most realtors do, so things are moving slower than they otherwise might be. Obviously, waiting for the HouseValue’s of the world to develop this technology is an option. However, their business model seems to be marginalizing the value of a realtor instead of enhancing it. I’d rather take the opposite tack, since I suspect that my future customers would prefer to use technology to improve their competitive advantage against all comers rather than having it used against them and risk turning themselves into a bunch of “me-too” commodity realtors paying somebody else for random sales leads. (which is probably one of the reasons you blog!)

Right now, you can take a gander at the humble beginnings of our grand vision at http://listings.raincityguide.com/search.aspx. Granted we still have a few bugs that need to be fixed, and many, many more features need to get implemented. However, it’s my goal to turn this into something that would provide a compelling value for my future clients (realtors & their customers) and I welcome any comments that would help me, help you.

Robbie
Caffeinated Software