Corporate Blogs – Yes please!

Posted on August 5, 2006 by Robbie

Dustin’s comments in his last blog post got me thinking (which is never a good thing). Dustin said “You just set my blogging efforts at Move back by a year or so”. To which I reply, “I hope not! You don’t have that much time!”

One of the cool good things that has happened recently is the rise of corporate blogging. What’s interesting is you’re finding them in places you wouldn’t expect. Did you know Dell has a blog, meanwhile Apple does not? I think it’s an excellent way for a company to get in touch with it’s customers (and vice-a-versa), without the reality distortion and corporate hubris that happens when communicating via a scripted “public relations firm” message.

You may be surprised to learn that even the venerable General Motors has blog (In case anybody from GM management reads this – Good luck turning the company around and keep up the great work at Cadillac and Saturn. I’m rooting for you). If a 100 year old company in the rust belt has seen the value of blogging, I have to wonder why hasn’t every large company?

In case you doubt the potential of corporate blogging, look no further than Microsoft. Robert Scoble helped put a human face on the “evil empire”, by spearheaded Microsoft’s Channel 9 video blogs and wrote the book on corporate blogging. When he left Microsoft for PodTech, it created nearly as much news as when Bill Gates announced his “retirement”. An anonymous Microsoft employee, through his blog has changed the company for the better. Even though the Human Resources dept has a blog, and prominent engineers have them too, a small corporate blog can as useful as the MSDN blogging network is to the “Redmond Giant”.

I personally enjoy reading Zillow’s blog, RedFin’s blog, and Trulia’s blog every day. Even the HouseValues’ blog can be interesting on occassion (it seems like they have a fun corporate culture, even if they just sell leads for a living). But where is the John L Scott, Coldwell Banker and Windermere blogs? I know countless agents of those brokers and independent brokers blog and do it very well (I think I’ve seen most of them on Rain City Guide at one time or another), but where is the human voice of those companies? They should at least give me a way to search for their agent’s blogs. Are these brokers nothing but a logo for an agent to put on their marketing? They may not realize it, but I think they are losing mind-share (which may become market-share) by being silent in the blogosphere.

Which brings me back to my original question, regarding Dustin’s comment. When is Move going to get a corporate blog?

Although, Rain City Guide is an excellent blog, it’s not the most appropriate venue for Move specific information (nor should it be). Why hasn’t Move added RSS feeds to any page that offers e-mail alerts? How are Move’s product offerings better than other things out there? What cool stuff is Move is doing? Why would a Software Engineer want to work there? Why should a realtor advertise with Move instead of one of these “Web 2.0 upstarts”? Heck, why not feature profiles of happy customers (something HouseValues does well)? I’d love to hear somebody explain the the Innovator’s Dilemma that Move faces to your constituency, so they’d understand why Zillow, etc are steeling the mind-share that realtor.com used to have. What’s the best MLS in the country to deal with and why? If Dustin or his co-workers explained why things are the way they are, maybe somebody in a position to change things would read the blog and start talking? After all if GM blogs, the CEO of Sun Microsystems has a blog, and Mini & Scoble can change Microsoft, I think anything is possible.

I’m not trying to pick on Dustin, but I really want to add the Move blog to my RSS feed reader and I can’t!

Improving Online Home Valuations?

Posted on August 4, 2006 by Dustin Luther

This past week, Top Producer quietly rolled out a home valuation tool, called HomeInsight, for a few markets in California and Washington*. I was not part of developing the tool, but I like it enough to pass along the link to Rain City Guide readers before the local media picks it up.

What differentiates this product from others is that it not only includes sold data, but also real-time listing data. The result is a page of information for each home that includes:

an interactive map that gives details on ten similar nearby homes (5 that are for sale and 5 that have sold) and
dynamic charts that give the average/high/low listing price, the average/high/low selling time and the average difference between asking and selling price for the neighborhood of interest.

[photopress:image002.jpg,full,centered]

However, as with all things that sound too good to be true, there is a catch. In order to pull live listing information, the servers pulling this data have to go through an agent’s connection with their local MLS. (Don’t ask me to explain why, and definitely don’t ask Robbie, but anyone reading RCG for a while knows that the MLS’ have rules!) The result is it takes 5 to 15 minutes for the request to go to the local Realtor’s Top Producer account and then for the Realtor to initiate a report that pulls the data off the MLS servers (yes, a server call to the local MLS is necessary each and every time a request for a snapshot is made). Consequently, the only way to get your snapshop is from a link sent via email about 10 minutes after you complete the form.

So, how do you get a market snapshot for your home? Simply go to HomeInsight and fill in the required fields. (Remember it is only available in a few places right now!*)

If you don’t want to fill in the form, live in another part of the country, or feel guilty about sending people like Jim Reppond a “false” lead, then you can also check out this dummy snapshot filled with made up data.

And as much as I hate disclaimers, it is important to note that these are my opinions and my currently employer is not responsible for what I write on Rain City Guide.

* This tool is currently only available in parts of California (Hemet, Huntington Beach, Laguna Niguel, Long Beach, Los Angeles, Mission Viejo and Norwalk) and Washington (Bellevue/Eastside, Bremerton, Everett, Federal Way, Greater Seattle, Puyallup and Tacoma)

A Rock’n Home

Posted on August 4, 2006 by Dustin Luther

[photopress:sleepless_in_seattle.jpg,thumb,alignright]Just received this in my inbox and I’m clueless as to the answer.

I’ve searched through your site but I’m wondering if you have any advice on buying a houseboat in Seattle.

I’m looking to spend up to $220K plus moorage, but I know very little about how I finance these. I hear it’s complicated and requires a larger down payment.

Any advice?

Any Rain City Guide contributors and/or readers with Houseboat experience?

My Friend, Bob

Posted on August 4, 2006 by ARDELL

[photopress:bob.jpg,thumb,alignright]Many, many years ago, my friend Bob was spilling his guts to me in a long conversation about him and “The Firm”. He was at the crossroads of life that many businesses face. Bob joined Obermayer, Rebmann, Maxwell & Hippel, a major lawfirm in the City of Philadelphia, in 1970, just two years before I was hired at Girard Bank, another Philadelphia mainstay.

I don’t know why I remember this conversation as vividly as if it were yesterday. Bob said, Ardell, we’re at that place. We have a great team of attorneys who all know each other and mesh well. We have a huge base of repeat clients that feel like old friends and who trust and respect us, and whom we enjoy serving. Now we have to decide whether to GET BIG or stay small.

Every time I am on the other side of a transaction with a “Top Agent”, I think of Bob and that conversation we had some 25 years ago. When I see an agent’s name on the bottom of a Purchase and Sale Agreement, when an offer comes in, but never meet that agent. All communications come through a licensed real estate assistant who just faxes papers back and forth and never meets either the buyer or the seller. The agent, who has the authority and responsibility to assist the clients in some major decisions, delegates everything to an assistant who makes “weekly calls to the client” in some pretense of “keeping in touch” on some designated every other day schedule. “Hi, just calling to let you know we are alive and well even though you never see us.”

Today, Bob is the Managing Partner of the Philadelphia office, and Obermayer, Rebmann, Maxwell and Hippel has offices in Philadelphia, Harrisburg, Pittsburgh, Cherry Hill and Wilmington…three states. Bob’s still Bob, Robert I. Whitelaw, the managing partner. When I last saw him he had fallen off his bike and was nursing a sore arm. We’re both a little older and wiser, and I often wonder if he had a chance to go back to that day, when we were laying back shooting the breeze, if he would make the same choice to go big, or would opt to stay small.

Every agent faces that crossroads sometime in their career. Do they hire two assistants and a marketing manager and five “Showing Agents” and a Transaction Coordinator? Do they go to that point where when one of their clients comes in the door, and “the agent” passes them in the hall without noticing, because they’ve hardly ever interacted with them after the first day when they met and were passed off to the “showing agent” and then the “transaction coordinator”. Do they go to that point where they don’t remember more than half of the homes they have sold or any of the people who hired them to sell it?

Bob, or course, opted for big. But I knew when we were talking that he really didn’t want to do that, and felt he had to for the sake of “The Firm”. Aside from hiring a “free lance” assistant during heavy times, and occasionally pulling in a “showing agent” when circumstances put me in a position of having too much to do on a given day, I’ve pretty much put a cap on how many people I will “take on” all at once.

I know I can do a bang up job if I handle 24-36 clients in a year’s time. I will remember their faces, and their spouses and their children and their home that I helped them to acquire. When Travis called me “back” when I was in L.A. to sell the place I had sold to him, I remembered every single aspect of the time we had spent together over two years before. Travis didn’t hesitate to wait for me to return to Seattle from L.A. He didn’t call any other agents, just me. We spent hours together getting the place ready and reconnected. We hugged, we strategized, we painted and primped. We reviewed offers and talked and kicked back and had a glass of wine.

And so today I think of Bob, and his reluctant choice to get big and not stay small. I’m very, very happy today that I chose to know all of my clients, and be with them through every tiny aspect of the process. But “What About, Bob?” and his choice…I’ll have to give him a call…I still miss him after all these years.

Title Insurance: Kickbacks, Competition & Pricing

Posted on August 4, 2006 by Tim

Editor’s Note: Tim Kane owns and manages (with his wife Lynlee) Legacy Escrow, a local escrow company and has been a regular fixture of the Seattle blogosphere for the past year or so… Not only does he run his own blog, the closing table, but he has contributed to numerous threads on RCG under the names of Chief Errand Boy, S-Crow, and Tim. I’m definitely excited to bring him on as a regular contributor!

“I have a special interest in Ethics in Business, particularly in the industry of real estate. A good many of future posts and comments will address ethics, much of which is drawn upon the experiences our small escrow office encounters in working with our clients, loan officers, title insurance companies, and Realtors every day.

Real Estate Search Demographics

Posted on August 3, 2006 by Dustin Luther

If you haven’t seen it, Microsoft released a demographic tool that gives the estimated demographic for a search term and/or URL. Just for fun I threw a few of the major real estate technology sites (as well as the search term [real estate], kept track of the results, and that pushed this chart out of Excel:

[photopress:real_estate_search_demographics.gif,full,centered]

So, assuming that Microsoft’s numbers are correct, what patterns emerge?

The search term [real estate] tracked really low for people under 18 and high for people between 25 and 34 (kinda makes sense!), but none of the websites tracked near these extremes.
HomeValues and HouseGain… I mean HouseValues and HomeGain attract nearly identical audiences.
Trulia and Zillow attracted almost identical audiences as well (never off my more than 2% for any demographic)
Zillow had the most balanced demographic pattern with between 18% and 22% in each category.

Note the obvious: Microsoft only has demographic information on people who give it this information. This means that the data is just as suspect as the Alexa data.

The MLS and Creative Sales

Posted on August 2, 2006 by seattleeric

It’s amazing the stories I hear about the self-policing that occurs on the MLS (some of it seems more like snitching, in my opinion). One of the big no-no’s is listing any reference to an open house in a listing’s marketing remarks. The reason for this rule seems clear enough; with so many of the big guys subscribing to feeds of all the listings, the MLS doesn’t want to bite the hand that feeds it. The Windermeres and John L Scott’s don’t want prospective clients to go to open houses on their own, they want their agents to represent these prospects.

On the more creative side, an agent I know had her hand slapped after she tried to emulate an auction situation, using her MLS listing to attract buyers. She is also an investor, having bought the home in question on a lease-option. The previous owner did a beautiful rehab job, but ran out of money and needed out fast. She stepped in, leasing the place (the lease payment covering holding costs for the owner), with a year option to buy for what was owed by the seller. She also took a chance and put another $15K into the home to finish it out (a risk since she didn’t own the home). With her large equity position given the market value of the home, she decided to test the waters, and create a situation that would attract more offers.

First, she offered a buyer’s agent commission of 4%. Then, in her creativity, she made her first mistake. In the agent-only remarks, she explained that the 4% would be added to the highest bid price. This was also clearly stated in the auction rules posted at the property during the open houses, available to all potential buyers. Her thinking was to put walk-in buyers on the same footing as buyers with agents (there were two open houses over the course of a weekend, then bids were accepted – no time for lockbox enabled agent visits), thereby creating an apples-to-apples comparison when reviewing competing offers. In other words, the final bid price would be the net (of commission) price. If a buyer with an agent offered the highest bid at (for example) $100,000, then price would be grossed up to $104,000, with the investor/agent/seller paying out the $4000 commission to the agent at closing. If a walk-in buyer offered the highest bid, then no commission is necessary (since she is the owner of the house, there’s no need to pay herself a commission…she’s getting all the profits anyhow). I can understand why she got in trouble for this. The MLS is for agents, not joe consumer. Agents would naturally prefer that the buyer’s agent commission is included in the final cost of the property. With this gross-up method, savvy buyers (even dumb buyers) would realize that they would have saved $4000 had they gone directly to the open house without an agent.

The other creative step she took was to include the word ‘auction’ in the agent remarks. She listed the home at her acquisition cost, knowing that it’s true market value would grab the attention of agents. Her objective was not to deceive, thus the reference to an auction (all bids would be reviewed at the end of the second open house).

However, on both counts, other agents snitched her out. I think each of her creative marketing ideas went against the traditional thinking of the industry.

In trying to offer a grossed up commission (and super-sized at that!), she was bringing the bright light of transparency to the transaction. Though her intent was not to ‘out’ agents who don’t discuss compensation with their clients, this is clearly the first thing many agents thought about. The agents would publicly claim that ‘it isn’t fair’ to raise the price 4% after a final bid has been made. On the contrary, as long as the this is known from the beginning, there should be no problem. If buyer’s agents openly discussed compensation with their clients, then clients would have a better chance of understanding that grossing up the offer to capture commission is not a big deal.

As for trying to market an auction, I think agents didn’t understand what the investor/agent/seller was trying to accomplish, or they were thinking of a Sotheby’s style of auction, which would be uncomfortable for agents and buyers alike. In either case, it was just strange enough to be deemed out of place on the MLS.

I’m guessing that some agents reading this are thinking, “yeah, this seller/agent should burn in hell for what she tried”. However, being an investor myself, I applaud her creative approach to trying to maximize the price she can fetch for her property, and for trying to structure the commission so that agent represented buyers and walk-ins are treated equally.

I FEEL LIKE A DOG!!

Posted on August 2, 2006 by ARDELL

[photopress:collie.gif,thumb,alignright]I feel like a dog this week. Four times this week I went into people’s homes to tell them what they needed to do to get top dollar for their home. The last two times I turned people’s homes upside down and sold them quickly for top dollar, I had no problem at all. I told them to give me the key to their home. Told them to go to work. And when they came home they were amazed at the difference and were happy, happy, happy!

But this week…I had four experiences that just make me feel like a dog!

Generally, when I stage an occupied home before putting it on the market, there is little to no cost at all. So I have no “bad news” that hurts them financially. I often do most of the work myself as part of the commission, so there’s no added expense and people are happy. So why was this week so different?

Mainly it was because of the people. The last two times the owners really wanted to move. This week, everyone who was selling “needed” to sell and “needed” to move, for reasons beyond their control. When someone really wants to move, they have no trouble when I move their stuff around. This week, as I pulled things off of the wall that people bought from “home interiors” back in 1983, and stacked all the chatchkis in a big pile, I could feel the pain of the memories coming down with the chatckis.

Tonight it was Roosters. Roosters, roosters everywhere I turned. Two days ago it was 3D Cherubs peeking at me from every wall, most of them with gold filigree hanging from their chinny, chin chins. The toughest one of all was a dear friend of mine, a guy, and I swear he had tears in his eyes when I told him the “schocking blue” walls had to go!! He had just painted it that color to get it ready for market.

This is why most times I just have to go in and take it all down myself. I have an “eye” for getting the home just right and I’m not attached to the chatchkis like they are. It hurts them when they come down, but they don’t put them back up after I take them down and it hurts them more if they take them down themselves. It hurts them much less if they just leave and let me do it, and they come home to the “new look”.

“Detaching” from the home is a very big part of of the home selling process. The closer they are to detaching from the home, by the time they get an offer, the more likely they will get a higher price and handle the negotiating with less emotional charge.

I would never put someone through this if it didn’t make them more money. And sometimes I think I feel worse than they do when I’m done. And I know I’m not doing them any favors if I allow them to “leave money on the table” by “being nice”, and letting the house go “live” into the mls, before it is ready to be shown.

Representing “people” rarely means telling them what they want to hear, or stroking their egos. Most often it means having the guts to tell them what they need to hear, and rolling up my sleeves and just doing, what they can’t bring themselves to do.

I know in my heart that I’m doing the right thing, and helping them get the most money they can for their home. But I still feel like a dog.

The “Ideal” Business Plan

Posted on August 1, 2006 by ARDELL

[photopress:meeting.jpg,thumb,alignright] In answer to Russ’ comment on my post of this morning, How to Choose a Client, let’s break down how an agent can do a super-duper job at representing their clients’ well, choose their clients wisely, and also make a good living AND price their services fairly….all at the same time!

John Q. Agent wants to make a six figure income of $100,000 a year after gross expenses. He decides to work with no more than 2-5 active clients at one time, so that he can do “Whatever it takes” to help his clients fulfill their objectives. By focusing on 2-5 good-hearted, honest and serious clients, he is able to sell 2 houses a month and loses only 1 in every 15 clients he accepts to “take on”. By focusing on only 2-5 clients at once, he does such a super job, that he doesn’t have to pay for leads or spend the bulk of his time looking for leads, because his very happy, good-hearted clients send him business. By recognizing that he represents people for a living, and doesn’t sell houses for a living, he leaves a long trail of happy closed transactions in his wake. All of this “good will” brings him a steady stream of new clients, so he can spend all of his time representing his clients and very little of his time dredging the bottom of the barrel for “new leads”. His “good-hearted” and happy past clients, know other “good-hearted” people because, “birds of a feather flock together”.

Average home price is $400,000 in the Seattle/Eastside Market. That’s a little under the actual median price, but let’s assume that the best clients don’t necessarily have the most money 🙂 Let’s assume that John Q. Agent charges slightly less than 3% for clients buying and selling at $400,000 or less and 2% for clients buying at $750,000 or more and 1% for clients buying at $1.5 million dollars or so and also has varied programs in between, depending on the timeframe and actions needed to fulfill the client’s objectives.

So John Q. averages $13,500 per client, but gives $4,500 of that back, even after the reduced rate, on average, because he only needs to make $9,000 apiece X 24 sales (two a month) to make $216,000 of which he pays his broker a cap of $20,000 annually leaving him $196,000 before “expenses”. Keeping Russ’ figure at 20% for “expenses”, John Q. Agent exceeds his goal of $100,000 by making $156,8000 after expenses working with only 2-5 good-hearted, honest clients per month and selling 2 homes a month and “being the glue” that holds them together so ALL of them close, and it is NOT a numbers game…in fact, it’s not a game at all.

John Q spends 20 hours a week on his “in escrow” transactions and 20 hours a week on helping his “next to come out” listings get their homes ready and 10 hours a week doing all that other stuff that agents do. He spends so much time focusing on these few clients that none of them “leave him in the dust” or “screw him”. Though a few do decide not to buy or sell…and he wishes them well.

And they all lived happily ever after…

How to Choose a Client

Posted on August 1, 2006 by ARDELL

[photopress:diversity.jpg,thumb,alignright] I have only one criteria when choosing a client. That criteria is very difficult to describe, because the best term to describe my favorite clients, I only know in the Greek language. I dated a Greek guy for six years, from the time I was 16 until I was 22. Whenever he introduced me to his Greek friends and relatives, they would lightly and quickly thump their fist on their chest and say

“kalu ka thYA” (emphasis on the YA). Generally, they were saying, “She has a good heart.”

When I meet a potential new client, I am actually interviewing them to determine whether or not I want to work with/for them. This can be a great business or it can be a miserable business. The difference between the two is the clients one chooses. Agents who view all people as “leads”, who think anyone wanting to buy or sell a property is a “potential client”, do both themselves and the client a great disservice.

My talents are best suited to people who need my “help”. To sellers who need to sell their home at the highest price they can get, and who are willing to roll up their sleeves WITH me, and get the house to its highest potential, spending little or no money to do that. To buyers who recognize that there are many potential pitfalls in the home buying process, and who want someone to tell them when they are about to make a mistake.

[photopress:winner.jpg,thumb,alignright] I have very little time for someone who wants to end up with all of the chips on their side of the table when the “deal is done”.

I have very little time for a seller who thinks his house is ready, because he shouldn’t have to do a thing to get top dollar and he can wait for “just the right sucker” to come along and fork over more than the home is worth, so HEcan WIN and THEY can LOSE.

I have NO/ZERO time for a buyer who wants to find some little old lady who can be tricked into selling her home for a great deal less than it is worth. (Yes, I have met people like that.)

All of of my clients are people raised with good values and who have a strong moral code, in other words…people who possess “kalu ka thYA”…”a good heart”. Once in a blue moon, I agree to represent a total bastard…but only because I feel sorry for his wife 🙂

So when a buyer or seller complains, “I guess they didn’t NEED my business because they never called me back after we met”, maybe the agent didn’t “follow up” because the agent chose you, not.