And then Ardell happened…

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In a comment the other day, I mentioned that I would write a post about the origins of Rain City Guide, and while my initial reaction was to talk about all the different influences that led me to think that blogging about real estate was a great marketing idea, I realized that (1) those influences were already discussed when Andy interviewed me last December and (2) that background is only interesting on a personal level.

So instead, I’ll take a different tack and start with the risks of starting the blog as I saw them… What did Anna and I have working against us when we started blogging about real estate?

  • Time: I had a full-time job as an engineer and could only devote a few hours a week to real estate writing
  • Knowledge: Both of us were new to real estate and had very little technical knowledge and/or experience to add value to existing real estate discussions
  • Money: We had no extra money to devote to the site. Life as a transportation engineer had pretty much tapped out our family budget.

However, I’m rarely one to look at the glass half-empty and instead I looked for ways to benefit from our weaknesses.

[photopress:sashas_shoes.JPG,thumb,alignright]To address the time, knowledge and money issues, the obvious solution was to attract knowledgeable professionals to write for Anna’s site. Not having many resources, my best bet for attracting others was to build something where “they” could directly benefit. Hence, the name change from Homes By Anna to Rain City Guide and a lot of altering of the design to highlight other contributors (like the photos by the side of each post, the photos along the sidepanel, and the listing of recent comments).

This led to the empowering realization that the site was no longer a marketing brochure for Anna’s real estate business, but rather, it was a destination worth visiting in it’s own right… For better or worse, I saw our main competitors being the online real estate section of the Seattle Times, although in retrospect they seem like an easy target. For a blog, we have a lot more freedom than they will ever have to be more controversial, interesting, and up-to-date.

My first steps were to read and study the types of things that the popular bloggers were writing about and how they approached topics. Much of my initial posts were copied from others except I’d add to the conversation by talking about how popular technology and/or marketing issue related to real estate. That strategy worked to my advantage because I definitely felt more confident writing about real estate technology than real estate transactions.

I then sent Anna out to attract additional writers at every opportunity. If she was on one side of a home buying transaction, I made her promise to tell the other agent about the site and see if they would be interested in writing on RCG. If a mortgage broker delivered a presentation to her office, I made her promise that she was ask him/her if they would write articles for RCG. This continued all through the Summer of ’05.

[photopress:dustins_shoes.jpg,thumb,alignright]The end result was that we dealt with our main disadvantages by getting experts to write for the site. Not only was the writing of these professionals free, but they also had time and added knowledge that went beyond what Anna and I could produce. Ironically, if we were experts, I bet this would have been much more difficult as the contributors would have been more likely to view us as a threat and/or competitor.

However, this set-up was not the panacea. We simply were not attracting enough eyeballs to get enough leads to keep other contributors interested in writing on a regular basis. It really wasn’t until Google began sending us a significant amount of free search traffic in the Fall of ’05 that we were able to attract other real estate professionals.

This brings us to early winter of last year when things seemed to be pretty good. We were getting decent traffic and I noticed that people started to link to RCG as a real estate resource. And then Ardell happened. It won’t surprise any long-time RCG reader to hear that when Ardell started frequenting the comment section of posts, her spunk and insider knowledge brought the energy level of every conversation up a few notches. Right around Ardell’s first posts, the traffic on RCG started to spike and has yet to let up.

Since then, getting people to write for RCG has been much easier (although not as easy as you might think!). I tend to troll all the local real estate blogs and contact the professionals that “get it”. Normally, the promise of more people reading their writing is enough to convince them to join us at RCG, but not for everyone. You might also find it interesting that I’ve never signed an agreement with any of the contributors. About as complicated as things get is that I make a vague promise that if they are willing to publish on a regular basis, then I will:

  • List them as a “Featured Contributor” on the sidepanel
  • Add a mini-bio (including their contact information) on the Contributor’s page

I feel pretty darn lucky that we’ve been able to keep things so simple and still have it function. If I had to give any advice to someone interested in starting a similar blog, it would be:

  • Keep it simple. Don’t start writing up complicated revenue-sharing plans before you have any revenue!
  • Don’t charge for things that should be free (i.e. blogging technology)
  • Focus on being interesting!

In the beginning, I had no idea what type of content would make for an interesting real estate blog. It has only been through a ton of trial-and-error that we’ve even approached the level of engaging conversations that occur today. With that said, I feel lucky in knowing that we are still in the primitive ages of real estate blogging and I’m still learning new things every day! 😉

Break’n My Heart

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I try to stay away from too much self-promotion over on RCG, but the last 24 hours have been too much and my head is starting to spin…

Greg Swan of the BloodhoundBlog:

This is actually our third swing at a real estate weblog. It was the example of Rain City Guide that showed me how I wanted to approach this.

Never doubt it: I’m in your debt.

Chris Bubny at Real Blogging:

Today’s great real estate blog post focuses on Rain City Guide which might very well be my favorite real estate blog. Dustin Luther, now the Director of Consumer Innovation for Move.com and a heck of a guy to boot, started Rain City Guide over one year ago in an effort to market his wife Anna’s real estate business. Rain City Guide is focused primarily on the Seattle market but can also be a great resource for the occasional off topic post. There are 10 Rain City Bloggers who talk passionately about the market from their respective and specialized point of view. Rain City Guide combines a wonderful blend of intimacy, intelligence, passion and fun technology. A few key reasons why it’s one of the most wide read and interactive real estate blogs in the sphere.

Joel lists us as one of his top 3 most influential real estate blogs.

To top it off, the president and COO of Coldwell Banker Los Angeles says she wishes every CB agent could attend our bloginar:

Dustin and Russ,

I wish every agent in Coldwell Banker had been present last week. Exciting, thought provoking stuff. Touching life at new points!

Where and when is your next appearance? You are a dynamic duo!

Thank you for the energetic, informative session.

Future of the Real Estate Industry?

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Hint: It is being discussed and decided this week, but not in San Francisco.

John Cook picks up this quote from Glenn Kelman of Redfin on what he will testify about when placed in front of U.S. House of Representatives’ Subcommittee on Housing and Community Opportunity:

“I am going to say how much friction there is in the business,” said Kelman, adding that as one of the first online brokers Redfin has been “kicked and spat on” by the Multiple Listing Services in California and Washington.

Ouch! I’m sure that once he testifies, relationships with the local MLS organizations will quickly be healed. 🙂

If this topic interests you, then definitely check out John’s column because he provides some great links.

Sales that “fall apart” on Home Inspection

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[photopress:brokenmask.jpg,thumb,alignright]Tim’s Comment: “What many do not realize is the extent and frequency in which commissions are reduced via credits to the parties at closing. It is very common.’While Tim raised this subject as if these credits were commission negotiations, and sometimes they are, more often these credits are how agents help the buyer and seller accomplish their true objective. The true objective of a seller is to sell his house. The true objective of the buyer is to close on their new home.

Often during the home inspection negotiations, people get all upset. The buyer is really ticked that “the seller won’t fix…:and the seller is really ticked that “the buyer is being so petty as to want him to fix…” For many, many years, agents have used a portion of the commission to keep everything together and throw money at the problem that the buyer wants fixed and the seller won’t fix. With commissions being reduced, and so many agents paying referral fees and bottom feeder site fees and lead generation fees, there is less and less money available to keep these sales together, so more and more are falling apart.

It will be very interesting to see if the new business models that cut the commission down to the bare bones, have a higher rate of sales falling apart at inspection time, with not enough commission in play to fix what the buyer wants fixed and the seller won’t fix. The first time I saw an mls listing that required the buyer agent to submit the offer directly to the seller, one of the $500 mls only listings, the poor sellers were on their third round with two sales falling out of STI. They had even lost the house they were going to buy because of the failed efforts, and were on their third try at getting a buyer that would “stick” to the end. So my guess is the less money on the table to hold everything together, the more sales will fall apart.

When I negotiate with a buyer or seller, I make sure based on the type of property and price range, that I am not leaving the client so short, that the objective cannot ever be attained.

Most Innovative Blog Nomination Dinner

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[photopress:Innovator_finalist.jpg,full,alignright]Inman’s Most Innovator Awards will be announced at a the SF Connect conference on Wednesday (7/26) between 5PM and 6PM… I’ve had more than a few requests to have dinner/lunch over the two days I’ll be at Inman, so what I’d like to do is organize a dinner at one of my favorite restaurant in SF, House of Nanking, with anyone and everyone being invited. It is not a fancy place (and their service is definitely nothing to write a blog entry about), but the food is soooo good.

For those not familiar with San Francisco, House of Nanking is a long walk (or a short taxi ride!) from the Palace Hotel. It is on the border of Chinatown and North Beach (the Italian district) in a micro-neighborhood I’ll always associate with the Beat Generation. There’s Vesuvio, Caffe Trieste (warning: music!), and, of course, City Lights Bookstore, all of which are still operating and will always thrive within the writings of Jack Kerouac, Lawrence Ferlinghetti, and many others from the Beat Generation.

To summarize, if you’re reading this blog post, then you’ve been invited to join a group of us as we descend on North Beach on Wednesday evening (I plan to be at House of Nanking around 7:30 or so). Also, I’m covering the first round at Vesuvio’s for any and all real estate bloggers who were nominated by Inman! 😉

Seattle Street of Dreams – 2006

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Robbie, Stephanie, Harrison and I went to the Street of Dreams together yesterday. What I enjoyed most, was their company. What Harrison (age 3 1/2) enjoyed most, was the school bus ride from and to the car. His first ride on a school bus.

The house I liked best, though not everything about it, was of course the highest priced one at $5,500,000, but I’d want it moved somewhere else with a view. Because I am a “view person”, not everyone is, I came home and liked my own house better than any of them.

Trends, products, styles, features…a run down. I guess I’m “jaded” by having seen lots and lots and lots of houses all over the country, because I didn’t see anything I liked, at least not that I liked in that setting. House number 6, which is purportedly “sold” was the best of the batch, all things considered. Best lot, house that seemed appropriate to the lot and setting, house that seemed appropriate for the area. But I’d like to “live in it” for a week or two like a timeshare. I’d want to move it to the bottom of a ski resort and timeshare it out for two weeks at a time unless I could afford it as one of many homes as a “getaway” house. But then I’m a City Girl who can’t be rustically oriented for more than two weeks at a time. I get hives.

Lots of too much dark, caves, caverns, pitch black theater rooms, stone inside the house, even a clay tile roof inside the house. Lots of too much “old” as in new made to look “old”. Coming from Philadelphia, I know what old looks like, and that’s not it. Two of the homes had a very dark “wood” floor that was supposed to look like the floors of an historic home. Not. Wide plank…yes, dark, yes, waves in each and every plank…not. Someone said it looked like it was made out of plastic.

Every house had a “butler pantry”, I think, and I was evaluating them all. One was totally off as if the designer didn’t know what a butler pantry really was all about. A butler pantry, copied from historic homes which were likely homes patterned from England, is that small galley between the dining room and kitchen with counters and cabinets on either side. It originally did not have a sink, as any water used by the butler would have been the “soda water” type in a bottle to freshen and make new drinks for the guests. For a “butler pantry” to be “true”, the butler should be able to stand in it and see the whole dining room table from it. He watches and quietly comes out as needed to fill a wine glass, freshen a drink or refill the string bean bowl as it gets low. The vantage point should be such that the guests do not really see him most of the time. So the one butler pantry that had only one side and standing there gave the butler a view of the backyard? I don’t think so.

Stephanie noticed this and it was a riot. In one house there is a fish tank inside the shower. Cool, but…the other side of the fish tank built into the wall was not in the master bedroom, it was in the hallway! I went into the shower and did a little dance as Stephanie stayed in the hallway to see if she could see me moving about. All of the people in the house were laughing and talking about how the kids in the “West Wing” could sneak down the hall and watch Mommy and Daddy in the two headed shower through the fish tank.

Moral of the story is NEVER go to The Steet of Dreams with a Real Estate Agent. They look at what’s wrong…not what’s right, at least this one does. Mostly the homes were not “true to themselves” mixing modern smack against historic replica features. That new sink that looks like a laundry tub (modern) next to an island with an Early American spindle table leg built into the corner. The pantry with relatively cheapo looking shelves, with a crystal chandelier hanging in the middle of the pantry. Better to hire a carpenter to build the shelves in, if you are planning to hang a crystal chandelier up between the Frosted Flakes and the Pop Tarts.

So Robbie and family got a taste of what looking at homes with Ardell is like. They look at what’s right, I look for what’s wrong. Robbie kept wanting me to give an opinion of value and projected days on market…but that’s something I do after I get home from showing property, as it is a “data” driven function, not a WAG 🙂

Inspiring People to Comment

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The total number of comments on a post is probably one of the better indicators that a blog post met the interestingness test.

Here are the top 10 most commented on posts on RCG:

  1. 8 Common Mistakes Made By Real Estate Bloggers – 70 comments
  2. You Have to Wonder…. – 66 comments
  3. Paying for the Privilege of Marginalization – 56 comments
  4. Adding Some Sun to Rain City Guide – 49 comments
  5. Why Google Base Matters – 48 comments
  6. Agents and Consumers – A Perplexing Business Model – 43 comments
  7. Is Your Earnest Money Protected By The Finance Contingency? – 40 comments
  8. Redfin – Something to think about. – 39 comments
  9. The Lame List Part II – MLS Rules – 35 comments
  10. Something’s Afoot in the Real Estate Business – but what does it mean and where is it going? – 32 comments

Here’s some of the common themes I see running through these posts:

  • Controversy. They give a strong opinion on a controversial topic.
  • On Topic. Rain City Guide is about real estate and the blog posts that are most commented on are all about real estate. While not surprising, I think it is worth noting that off topic posts are do not generate as much interest.
  • Minimal moderation. This may not be readily apparent to everyone else, but I haven’t had to moderate or remove almost any comments on any of these blog posts.
  • No begging for comments. None of the posts asked the users to comment… For example, not one of them states “What do you think?” at the end. I like to think that a good blog post “inspires” users to comment as oppose to asks them.

So… What do you think? 😉

Update: Paying people to comment is pretty darn effective as well. Looks like Hanan is giving away 100 bucks to one lucky person if enough of us go over to his site and leave a comment!

The Best Client Relationships are Solidified in the Darkest Moments

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[photopress:austinpowers.jpg,thumb,alignright]“Allow myself to introduce….myself” – Austin Powers

I’m in my first few months as a full time working agent. I retired from my career with a successful Internet marketing company after 8 1/2 years of helping grow it from a six person start up to a public company with offices on three continents. I left because I had lost my passion for the industry; I didn’t go to work each day looking forward to the challenges that awaited me. I needed something new. It took me two years to discover it, but after spending the last year with my wife investing in real estate part-time, I realized that I had found my passion. I had found my bliss. Real Estate. I got my license initially as a way to list our own investment properties for resale, but realized that real estate sales and investing got me excited. Here I am, starting fresh in the sales industry, juggling a number of balls related to real estate – client acquisition, client management, project management (on my investment properties) and property acquisition. It’s been extremely stressful (waking up in the middle of the night, in a cold sweat, fearing that I’d calculated time incorrectly and missed an inspection deadline), but also extremely rewarding (I sure don’t miss rush hour traffic!). This is my first post of any substance, and the goal of my commentaries is to reflect the sum of my experiences (which are currently few in real estate sales) Right now, I have little sales experience, a modicum of investment experience, and lots of client service experience taken from my previous careers in tourism (during my 20s), and online advertising (the bulk of my 30s). I’m thrilled that Dustin invited me to post.

“Customers don’t expect you to be perfect. They do expect you to fix things when they go wrong” – Donald Porter

One reason that I have succeeding in client service roles throughout my careers is that I tend to remain eerily calm when surprising and unfortunate situations arise (whenever one of my kids start choking, my wife completely panics and starts screaming; I set aside the adrenaline and calmly unlodge the blockage with a textbook execution of the Heimlich Maneuver). In business, I refer to the actions required to resolve these problems as firefighting. Most of the time, firefighting is required due to errors made by others outside of my control. However, no matter who is at fault, the client only has an opportunity how I deal with problems.

Rule Number One – Listen…Then Solve Problems

I get into trouble a lot with my wife whenever she starts telling me about her problems. I listen just long enough to identify the course of action needed to solve the problem, then interrupt her and explain how I’ll fix her problem. Big mistake. Most times, she isn’t looking for my to solve a problem, she just wants to unload her problems on to me…it makes her feel better having talked through it. After I validate her feelings, I can then ask if she wants me to help her with anything.

The same principle applies with clients. They come under stress from parts of their lives to which I have no exposure or access. For example, they may start complaining that they haven’t seen enough houses, and imply that I should pick up the pace and increase the number of showings. Before I try to problem solve and start scheduling more showings, I’ll listen carefully and try to determine why they are asking this question – especially when there has been no hint of this kind of issue before. In most cases, compartmentalized stress from situations spill over into my world. Instead of taking it personally, and before getting defensive or simply agreeing to the request (especially when I know I have been working hard on the buyer’s behalf), I’ll listen to what they are saying, acknowledge that I appreciate what they are feeling, then ask a series of questions designed to determine if there really is a problem they may have with me. If there is, I’ll offer solutions.

When I worked for Princess Cruises, I learned of an interesting statistic about customer service. Clients who wrote to the company complaining of a negative experience on their vacation demonstrated a greater loyalty to the company – they more likely returned on a second cruise – versus a random sample of cruisers. Why? These clients’ feelings were validated with a reply from the company. Was this loyalty bought with credits or discounts on subsequent trips? No, in most cases, it was a personally written letter or return phone call, where the clients felt that the company listened to them.That amazed me at the time, and you know what? It has born out in practice many times for me personally.

Rule Number two – Admit Your Mistakes, and then Proactively Solve Them

Here’s a situation I just saw in my first deal. My client had asked for a bunch of repairs on the 35R, including a certification showing a resolution to a possible Carpenter Ant issue. We eventually arrived at a deal, but instead of a fresh blank amendment stating the new price, I included the original 35R showing the repair list. All of you seasoned agents can see where this is going. It’s the day of closing. Both buyer and seller have signed around. I’m ready to pop the bubbly celebrating my first deal. Then I get a call from the Mortgage broker. The lender is requiring that an inspector clear both the carpenter ant issue and a dry rot issue (also in the report). Yikes. This made it past both the mortgage broker, and the loan processor prior to closing. I could have started yelling at these folks for not catching the problem when I submitted it (they have enough experience to know that submitting such a list is a red flag). Nope. I went into firefighting mode. I called the listing agent, told him of the problem; I called my client, admitting my mistake and letting him know that I’d cover any costs or penalties associated with this mistake. I then scrambled to get a pest control company out to the house to treat it and clear it, and I called the contractor who has worked on a couple of my investment properties to check the dry rot issue (which truly wasn’t an issue), and he cleared it.

The listing agent was impressed with my dedication and focus on solving the problem. Not only for my client, but his clients would have been impacted by a scheduled, near simultaneous closing for their next home. The listing agent told me that upon sharing my efforts with his broker, she said she’d love to have me be one of her agents. The deal closed a day late, and cost me $250 for the pest control, but beyond that, there was no negative impact to either side. My client was thrilled, and appreciated my honesty and my hard work and scramble to fix the problem. In my opinion, this is the type of client service that wins clients for the long term (especially if the client is an investor, as this one is), and wins referrals from satisfied clients.

In closing, no one is perfect. When I first started my client service career as a tour guide, I tried to please everyone, all the time – trying for perfection. This is impossible to achieve. However, by communicating honestly, and by performing my absolute best under less than ideal situations, any negative perspectives my client had were turned into positives. Anyone can do well when nothing goes wrong, and the client may very well come to the same conclusion, and deciding to use someone else next time. However, when the client saw how hard I fought for him during this adverse situation, he experienced my character, and will remember that in future situations, I’ll have fought for him. This helps create loyalty.

“To Achieve Perfection is not Nirvana, It’s a Self-Imposed Life Sentence” – Seattle Eric

Wrong Godfather

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[photopress:Godfather.jpg,thumb,alignright]Sellsius has the right point, but the wrong Godfather.

The Godfather of the people outside of “The Family” is the local State Real Estate Commission, appointed in most cases by the Governor of each state, and the protections for the people are in the licensing laws of each state.

The Godfather of the Realtors, the people inside “The Family”, is NAR and WAR and SKCAR and their counterparts around the country.

So in Mafiaoso-speak, Marlon Brando (in the Sellsius article) is the head of “the bosses” and Al Pacino is the Godfather of “the neighborhood”. (To be really accurate, I’d have to switch over to Sopranos…so I took a little license there, for the benefit of the non-purists, on the analogy.)

Point being, DOJ against NAR may help the Banks, more than the people, and local Departments of Licensing, and Real Estate Commissions, etc…make changes to affect the public at large. There are ripples to each that affect both…

but don’t go to the wrong Godfather on the day of his daughter’s wedding, or you may get the wrong wish granted, or no wish granted at all! For those not tuned in to “mafioso-speak”, it’s called “Barking up the Wrong Tree” 🙂

The “HOME” Stretch

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[photopress:home_stretch.jpg,thumb,alignright]The final days preceding the actual closing date are often the most confusing part of the home buying process. 9 out of 10 buyers and sellers think that something actually happens that involves them, on the closing date shown in their Purchase and Sale Agreement. I am often asked by clients “Should I take off work the day of closing?”

I can see no reason why the buyer should take off the day of closing, as most times you would have nothing to do to effect the closing, and you don’t normally get the keys to your new house until pretty close to the end, or after the end, of business that day.

There are generally two days that the buyer needs to take time from work during the real estate transaction. The first is in Phase 1, the home inspection. Yes, you can do it on Saturday and sometimes in the evening, but there are only 52 Saturdays in a year and getting the best inspector is worth taking time off work. Sometimes the one who isn’t already booked for this coming Saturday, may be the one with no appointments at all. So I would say you should plan to take time off to attend the inspection the first week after you have an accepted offer.

Now for “the HOME stretch”. You need to take time off from work (in most cases) to sign your loan documents and closing papers. This usually happens no later than the day BEFORE closing. It usually takes an hour. Sometimes up to two hours if you have a lot of questions. The frustratring part is you can’t plan ahead very well. Escrow companies will not schedule the appointment until they have the loan documents in hand. Very often that happens only a couple of days before closing. While I can’t get escrow to agree with me because they won’t even talk about an appointment until they “see the docs”, I usually tell clients to be prepared the day before closing, or the day before that, to take a couple of hours off from work.

Once all of the papers are signed, the buyer pretty much just waits until they get their keys. After you sign your documents they are sent (usually by courier or fax) to the lender for review. Lender review can take 24-48 hours at which point the lender “releases the transaction to record”. This release must happen in the morning or early afternoon. Once the transaction is “released for recording” the agent gets a call and then later in the day when it actually records, everyone involved gets a call with “recording numbers”. Once the recording numbers are received, you can get the keys to your new home. That last call often happens between 4 p.m. and 5 p.m. So taking the day off from work to wait for that call and your keys is usually not a good idea.

When the documents are very late, it could be either because the escrow timeframe was short or because the loan was “difficult”. Zero down loans with stacked costs or loan amounts that are stretching the buyer slightly past the place where the lender is comfortable, usually have more “conditions to funding” and tend to be the ones where docs are arriving very late in the game. If you have a credit score of over 750 and 20% or more down, the docs may come in very early, and all you have to do at the end is wait for the keys.

More often than not, the buyer looks like the poor gal in the photo above…and very glad to be at the finish line!