Category Archives: Investing

List of the Most innovative Search Sites

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Innovative Real Estate TechnologiesThere are so many interesting real estate search sites that are pop up every day, and in the process of trying to cover all of them in a blog format, I think things have gotten a little too scattered. So I took a little time this evening and put all of the sites that I’m aware of on one page along with a few notes about them. Check it out at:

At this point, I’ve broken all of the sites into four categories:

  • National Sites: major MLS and FSBO sites
  • Regional Sites: smaller data sets that are yet to go national
  • Specialty Sites: sold data, property information, etc.
  • Vaporware: still waiting for a product…

This beauty of making this list on a webpage instead of a blog post is that it will be much more fluid. I always feel awkward about updating a blog entry after I’ve posted it, but I’ll feel no qualms about updating this list on a regular basis. Along those lines, if you know of an innovative real estate tool that I’ve missed, please let me know!

Getting the Best Interest Rate on Your Home Loan?

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Consumers interested in purchasing or refinancing a home will pay an interest rate based on current market conditions and their ability to pay back the loan. The borrower’s income and debt ratios are taken into consideration by the lender, as well as the predictability factor provided by credit scoring. It’s important to have a mortgage professional in your corner that has a keen eye for solutions to improving credit scores in an effort to get the best interest rate possible.

Interest rates associated with various loan programs are broken down into schedules based on credit score ratings. While each lender has its own guidelines, it’s safe to assume that as the consumer’s credit score goes down, interest rates will go up.


A borrower with an outstanding credit rating will get what is called an A-paper loan. This type of borrower is rewarded with a lower interest rate because they have a proven track record of using credit sensibly and paying their bills on time.

Loans designed for consumers with less-than-perfect credit – sometimes referred to as “sub-prime

Where the Streets Have No Name…

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Grand View
Part I: Background
Just when I thought I was getting a handle on the players in the future of real estate search, today’s news unleashes a whole new set of opportunities! “Homestore, Inc., the leading provider of real estate media and technology solutions, today announced that Elevation Partners, a private equity firm, has agreed to invest $100 million in Homestore…”

Since I’ve been covering real estate search, I’ve had numerous emails, chats, conversations, etc. from real estate agents who think that I should highlight more of the companies that are working to improve the MLS instead of the companies that are looking to replace it!

More than anyone else, Homestore represents the hope that someone will provide an awesome, nationwide, competitive real estate search based on the current MLS system.

Why? Homestore already operates the largest real estate database, i.e.the database that operates Realtor.com.

Now mix together (1) the only complete nationwide MLS database (that I’m aware of), (2) $100M to improve operations, and (3) some VERY accomplished tech visionaries, and I’d imagine that expectations are set very high.

For Homestore, Elevation Partners brings a former Apple star, a former Electronic Arts star, a Silicon Valley star, and of course, a rock star… There are enough opportunities to make one’s head buzz… I’m thinking:

  • Real estate listings on my iPod
  • Simcity interface for home search
  • Home listing videos done MTV-style

Okay, so maybe my head started spinning a little too much! Back on planet earth, I’d say that all the players (Zillow, Trulia, Redfin, Google, etc.) building innovative home search tools should keep a close eye on Homestore. They already “own” a complete and nationwide set of real estate data (ownership in the sense that they have “possession”!). Should they start putting together some innovative tools, they have leverage that others are going to find hard to beat!

Part II: Where the Streets have No Name
I want to run
I want to hide
I want to tear down the walls
That hold me inside
I want to reach out
And touch the flame
Where the streets have no name

Part III: Your Mission Should you Wish to Accept It
Imagine that you’ve been invited to 2800 Sand Hill Road to discuss the future of real estate with Roger McNamee, Fred Anderson, Bono, John Riccitiello, John Doerr, and Joe Hanauer.

What do you tell them? What features do you want to see in real estate search? If you are an agent, what is the biggest pain that someone could fix with a technical solution? If you are a buyer, what are the major gaps you see in the current system? What information do you wish you had?

I know that some of my readers have some great ideas. Please share as much as you’re willing. Remember that these guys want to work “within” the current system (i.e. cooperate with real estate agents!), and, most importantly, these people are thinking huge… $100M huge!

The State of Real Estate Search

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real estate search enginesTom over at the Seattle Property News summed the current state of real estate search with this question: “Is there a regional bubble in online real estate sites?”

From a consumer’s point-of-view, it is wonderful that home buyers (and sellers!) are starting to see so many options come on the market. I’ve really enjoyed following as more and more of these tools come on-line and I thought I would take today to review some of the posts I’ve had on real estate search. If you are looking to freshen up on the future of real estate search, there is lots of information (and links to more info) in the following articles:

As a fun little aside, when a new search site is announced I like to see the type of buzz that it is getting in the blogosphere. The chart from this post shows the relative buzz that Trulia, Redfin and Zillow have been getting.

Also, there are a few small search sites, like Propsmart, that I haven’t covered mainly because I simply don’t have anything interesting to say about them yet. However, if you are building (or have built) a real estate search site, I’m definitely interested in hearing about it!

Tax Reform Hits Home…

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[photopress:soccer.jpg,thumb,alignright]CNN reports on some of the tax-reform proposals that have recently come out of a presidential panel. (note that none of these changes are law… yet… but rather they are just proposals and still have to go through congress.)

The panel recommended lowering the mortgage interest cap, which is the amount of a loan on which home owners would receive a tax break for interest paid, from $1 million to the average regional housing price in the range of $227,000 to $412,000.

The deduction would be converted to a credit equal to 15 percent of interest paid on mortgages up to the interest cap. A credit is a dollar-for-dollar reduction of the taxes you owe, while a deduction only reduces your taxable income by a percentage equal to your top tax rate. Deductions benefit high-income taxpayers the most and are limited to those taxpayers who itemize on the federal tax returns.

Generally speaking, the higher your mortgage loan and the higher your tax bracket, the more likely it is that you’ll see less of a tax break than you would under the current system. That’s because under the current system those in the highest tax brackets benefit most from the deduction.

CNN has more on how these changes could affect your tax bill here…

I really enjoyed Daniel Gross take on the issue in his article in his Moneybox column: Tax ’em Till They Turn Red.

In particular, he has a great description of the myopia experienced by both sides (i.e. blue-states vs. red-states):

Many of the people writing and talking about these issues suffer from one of two kinds of myopia. There’s blue-state myopia. Classic sufferers: Moneybox, Moneybox’s editors, many of Moneybox’s readers. These are people who think you have to pay seven figures to get a nice house with a nice yard in a nice suburb, or who think its normal to borrow $800,000 to buy a two-bedroom condo in a dicey neighborhood.

Then there’s red-state myopia. Connie Mack, the Republican ex-senator who is co-chairman of the tax advisory panel, is a classic sufferer. When asked by the New York Times Magazine whether limiting the deduction could “hurt the middle class and discourage people from buying, say, a $500,000 house?” he responded: “It depends on how you define middle class. I don’t think that there would be a large percentage of middle-income families that would have a $500,000 house.” Mack has obviously never spent much time in Staten Island, N.Y., where Vito Fossella, one of the few remaining Republican members of Congress in the Northeast, has already come out against the panel’s ideas. In the high-population, high-income states—the states that, by the way, produce a disproportionate share of federal income taxes—plenty of middle-class people live in $500,000 homes.

His analysis is definitely applicable to the Seattle market, where many people who would consider themselves squarely in the “middle-class” are living in $500k homes.

Stressful living!

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[photopress:IMG_5046.jpg,thumb,alignright] In reading today’s Seattle Times article on people who have used interest-only loans to get into homes they could not otherwise afford, I get the feeling that some people are much better at living under constant stress than me! 🙂

It can be a wonderful experience to own a home, but it still doesn’t make sense to me why people put themselves in these situations. I’ve heard some darn good arguments from investors regarding why it makes sense for them to use interest-only loans, but for the rest of us, it feels too much like gambling…

Dean Baker sums up the I/O like this: “In a falling interest-rate environment, you may be saving enough to make it worthwhile. But … in a higher-rate environment, there may not be a loan to bail you out.”

To quote the same phrase Dustin used a few days ago with regard to hiring a lawyer, “A good night sleep should not be underestimated.”

Why Refinance Back into a 30-Year Loan?

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One of the biggest reasons homeowners refinance their mortgage is to obtain a lower interest rate and lower monthly payments. By refinancing, the borrower pays off their existing mortgage and replaces it with a new one. This can often be accomplished with a no-points no-fees loan program, which essentially means at “no cost

GoogleBase Heads into Real Estate?

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Google BaseThe Search Engine Roundtable brings up the possibility that Google will slip into the real estate market as part of a much large (all-inclusive) database (or GoogleBase). This has a ton of potential and should Google get serious about listing real estate, this should be a major concern to all the people who are creating real estate applications (Zillow, Trulia, Redfin, etc):

There has been some talk this morning onto what will actually be included into Google Base, there are some nice screenshots that have come live this morning. Giving us a little glimpse of how Google thinks the world’s information should be organized. Here is a shot where you can post your items to Google Base and another shot where you need enter in some information about a house.

To get an idea of where they might go, check out this screenshot of a house listing. It is shockingly simple… but then again, the simple solutions are often the best!

Update 1: I was able to get into GoogleBase today and play around a little. I even found the “housing” page that is shown in the screenshot from above. However, when I tried to save a test entry, the system kicked me out. From my early preview, it appears that they’re building a “Craigslist on Steroids!”

Update 2: The NYTimes followed up on the idea of Google getting into real estate: “Among the many projects being developed and debated inside Google is a real estate service, according to a person who has attended meetings on the proposal. The concept, the person said, would be to improve the capabilities of its satellite imaging, maps and local search and combine them with property listings.”

“The service, this person said, could make house hunting far more efficient, requiring potential buyers to visit fewer real estate agents and houses. If successful, it would be another magnet for the text ads that appear next to search results, the source of most of Google’s revenue.”

Update 3: The property grunt had an interesting take on Google Base.

gHomes?

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The Mercury News reports that both Google and Yahoo are in talks with CoStar Group, commercial real estate’s largest firm. With Google’s reputation for building clean and fast web applications and their vast source of neighborhood data from Google Local, they definitely have the potential to build a killer application.

Along these lines, there have been some interesting discussions around the web lately with regards to developing sites around Google Maps. Greg Linden reminded me of a conversation I had a long time ago with Paul Rademacher (of HousingMaps). Back in June, Paul mentioned that he was reluctant to build a real estate search engine using MLS data because (1) all of the data was owned by other people and (2) the mash-ups are so easy to replicate.

I thought that Search Engine Watch had an interesting addition to this conversation when they point out that the real winner of the API/mashup model is often the company that is opening their service up. The mash-ups are a great breading ground for interesting ideas… but that when push comes to shove, the mash-ups are really just providing a way for companies like Google to let others figure out what mapping add-on technologies are worth pursuing:

It also demonstrates what I told a journalist recently about APIs not perhaps being as altruistic as they seem. Give the world an API to your service, and it’s a nice way to let everyone develop new ideas that you might later decide to do yourself, if they seem successful. It’s like Google’s 20 percent time on steroids, because non-Google developers still end up doing work for you.

As someone very interested in the future of real estate search, I’d definitely welcome someone like Google in the mix because I think they could add some some desperately needed innovation to the real estate industry.

Better Late than Never

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Smiling SashaJohn Cook’s Venture Blog pointed out today that Zillow got a new look and is now looking for beta users… Much to Zillow’s credit, they’ve created an aura of excitement despite the fact that no one knows what their product will look like, or when it will be available.

This got me thinking that it is clearly time for some updates on real estate search. The past two weeks, I’ve been too busy at work (WAY TOO BUSY) to write any posts, so I was glad that Anna took up some slack and wrote about Home Pages. However, I’ve had this nagging need to write a little more about the site, and I’ve finally found some time. Here are some of my notes from my test-drive of Home Pages:

The great:

  • Neighborhood information: It is really great that they’ve integrated so many different layers into their map. Just like Home Values, in the very near future all home search sites will need to include information like schools, parks, etc.
  • Sold Home Info: It’s great to have this information integrated into the search site

The good:

  • Personalized UI/mapping: I really like that they’ve developed their own user interface instead of relying on one of the big three providers (Google, Yahoo, and Microsoft). That should give them lots of flexibility into the future, although it also means they’ve taken on a whole host of update issues instead of passing the buck on that one. I’ll be interested to hear from someone at Home Values about their experience with this hosting their own mapping.

The bad:

  • Small map: Why so small? Blow up the size of the map at least 2X
  • Mac Issues: Elements of the screen don’t show up on my Mac. I lose the entire map at times… (by the way, I don’t notices this problem on my PC at work)

The ugly:

  • Contact Information: I hate websites that make you give personal information in order to get the full features. As a real estate agent, Anna already gets 2 to 3 junk emails a day from House Values (the company behind Home Pages), so I’d hate to think of the consequences of a potential home buyer giving them a phone number. Be VERY weary of giving them an email unless you want lots of emails that border on spam.

Home Pages is the only real estate search site that I’ve seen that even remotely compares to Trulia… and it has one MAJOR advantage over Trulia in that it is using updated Multiple Listing Service (MLS) data instead of screen scraping real estate sites. This is a huge advantage in that I’ve been told via email, IM, comments, etc that the data on Trulia is incomplete and outdated.

In many ways, my heart is really with the Trulia team because I think they are offering a superior search. I really like the clean UI, the RSS feeds, the home statistics, etc. but if they don’t have the most up-to-date homes available on the market, then I’d be hard-pressed to recommend their site to anyone looking to buy a home. For this reason, I’d have to say that Home Pages currently leads the market at the best publicly-available home search. If you haven’t checked their site out already, then use this post as inspiration to get an idea of where the future of real estate search is heading!