… has a new condo in Bellevue at the Meritage, you might have thought he would slow down the pace of his condo blogging at Urbnlivn. But no chance there… instead he unleashes the urbnlivn forum for the Seattle-area Market. Very cool. It’s a little quiet at the moment (the site is brand new), but I’m sure under Matt’s guidance, it won’t stay quiet for long…
Also a belated, but HUGE, congratulations to Matt on your new condo!
Every New Year, my husband’s family makes a trip to Ocean Shores with most of his brothers and sisters and nieces and nephews. It is a tradition that we look forward to which includes as much bowl games you can cram into a weekend, razor clamming, go karts and I get to read the newspaper from front to back while everyone else in our hotel room is still sleeping.
To my delight in the Dec. 30, 2006 issue of The Seattle Times, there is an article forecasting the local 2007 real estate market called “Looking ahead: The sky isn’t falling for the Puget Sound market
[photopress:mac.jpg,full,alignright]On a side note, nothing to do with the topic, isn’t that MAC advertising campaign fabulous! Doesn’t everyone want to run out and get a MAC when they see that commerical? Of course I can’t get the mls on it, or at least not easily, so I hate them. But that has got to be the best advertising campaign I’ve seen in a long time. Doesn’t everyone want to be that guy on the right? Heck, I’m a woman and even I want to be that guy on the right.
On to Microsoft vs. Google. So far my Google clients have been able to negotiate significantly higher savings in real estate transactions than my Microsoft clients. Of course I’m dealing with a very small portion of the Microsoft poplulation, even though I have more Microsoft clients than Google clients.
Microsoft has a contract that kicks back 35% of the real estate commission when a new employee is hired, even if they don’t buy a house for a year to 18 months after they are hired. Perhaps Microsoft doesn’t get all of that 35%, but the agent who has to pay it is still unable to negotiate with the buyer, nor are they as able, at 65%, to resolve issues in the transaction using commission dollars. This agreement that the agent pay 35% to Microsoft also limits the employee with regard to agent selection.
I recently had a call from a Microsoft employee’s wife who is being transferred. She was checking online and trying to pick an agent she felt comfortable with and happened upon me. I told her that she really needed to check with her husband and his employer, as I didn’t think she was totally free to pick an agent of her choice. I told her I might be willing to match the 35%, but she would likely need to try the assigned agent first, before suggesting she wanted someone other than the assigned agent.
Now these programs where an agent is assigned to an employee are, of course, beneficial. These programs have been around for a very, very long time. I myself did tons of relocations with Siemens and other companies around the Country, utilizing this very same program. The 35% of the commission paid by the agent to the relocation company, helps pay for a portion of the relocation benefits such as movers, temporary housing, and other benefits.
In my experiments over the past few months with negotiating buyer agent fees, and a few other out of the box negotiations, I have been able to transfer $20,000 of pure cash advantages plus an additional $10,000, into transactions, with Google clients. More importantly, I have been able to treat the Google clients in these negotiations, identically to the way that I treat seller clients…which is my goal.
If Google does hire 1,000 new people, as Dustin suggests they might, I hope that they will not lock the employees into a program that skims off the employee’s ability to negotiate and ties their hands with regard to agent selection. Relocating is a very stressful and emotional process. Feeling hogtied at the same time, only adds to the stress. While many are happy to have someone ready, willing and able to assist, this benefit should be optional at best and should allow the employee more freedom of choice and no restriction with regard to fee negotiations.
Not trying to change Microsoft here…just trying to encourage Google not to follow suit. Once released from the 18 month requirement, I have been able to assist Microsoft employees and negotiate fees, but the Google guys are still way ahead for some reason in total dollars. Not sure why that is, I’ll have to ponder it when I do my year end round up of “the experiment”.
Since we are entering the Age of Transparency in the real estate transaction, kind of like The Age of Aquarius in my day when everone was stripping off their clothes, I do think that it should not be a surprise to anyone that there is an exchange of monies between the agent and a third party. That goes for any “purchase of a person”, see Zapped, that does not disclose to the person that they have been bought and sold.
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 🙂
Bellevue is #21 of the top 100 best (smaller) cities to live in around the Country . What’s up with the “Biggest Employers” section though? U-Dub #1 at 25,000, Microsoft not listed?
How many employees DOES Microsoft have working on the Eastside?
[photopress:180px_California_state_seal.png,thumb,alignright]I recently returned from my almost annual vacation in beautiful California to visit my family and a few famous real estate bloggers (Dustin & Andy). And it was interesting to note what I learned about real estate in the Golden State during my two weeks down there…
Non surprises
Bay Area real estate is still expensive. That wasn’t surprising at all. It’s been that way as far back I can remember. During my coffee talk w/ Andy, we discussed how the San Francisco side of bubble bay has popped, and the Oakland side is peaking.
LA traffic is still awful.
Small Surprises
Santa Barbara is even more expensive than Silicon Valley.
Camp Pendleton is the only thing separting San Diego from Los Angeles & Orange County. I hope for San Diego’s sake, the Marines stay put.
RedFin has finally invaded the Bay Area. I wonder who’s next? 😉
Bay Area traffic is catching up to LA.
Big Surprises
Home values in Southern Ventura county (home to Dustin’s new employer) are on the ridiculous side of expensive. In fact, it’s Silicon Valley expensive. I wasn’t expecting cheap prices (after all, I did grow up in California), but I wasn’t expecting this!?
I didn’t expect Santa Ynez to be as expensive as it is. Maybe Wacko Jacko’s Neverland ranch has done to Santa Ynez’s property values, what Bill Gate’s house has done to Medina’s? My parent’s home town (Santa Maria) is comparitively inexpensive, but it’s about as pricely as the Seattle Eastside is (median price ~$450K).
San Diego County is downright cheap in comparission to it’s neighbors to the north. In fact, prices there are less than 10% more expensive than Bellevue! Maybe being next to the Mexican border is keeping prices low, but I would’ve expected San Diego to be second only to Santa Barbara and the Bay Area.
So what other markets in the country (or the rest of planet earth for that matter) have surprising prices (both more expensive and less expensive than you might expect)? I’ve heard from more than one local realtor, that many out of state real estate consumers have sticker shock when they first come to King County. And I’m still surprised that Portland is so cheap compared to it’s nothern & southern big city neighbors.
Probably the most frequent single question I get as a realtor from my friends and clients and contacts is “Are we in a real estate bubble?
Actually it was a great evening at the MIT Enterprise Forum program last Wednesday (3/15) on the topic of Online Real Estate. I was on the volunteer program development team that put the evening together, and I got tagged to put together this note for you 🙂 And my own personal thanks to all who helped us with insights and contacts to build the program, including Dustin. There’s already been a lot of great timely comments on the program in this blog, so this note is primarily to report some of the stats and survey results, and a couple of my own comments on disruptive technologies and market inertia (or active resistance, as the case may be).
Attendance at the dinner/program meeting was a sold-out 400 people, one of the highest numbers ever for an MITEF program. The program panel was made up of three local online real estate companies – House Values (Niki Parekh), Redfin (David Eraker) and Zillow (Spencer Rascoff), plus a broker, Real Property Associates (Gordon Stephenson), and an Internet savvy agent, who was also our moderator (Jim Reppond, Coldwell Banker). So it was a good crowd, and a good spectrum of players on the panel. The program consisted of introductions of the players and their companies, key questions and panel responses led by the moderator, and open Q&A from the audience.
Wednesday morning (3/22) we reviewed the results of the online survey we sent out to the 298 attendees that we had emails for – we got 96 responses back, which is a pretty good sample. Here’s some highlights of the responses:
Enough of the stats. Here’s some quotes from the comments that show more of the flavor of the event, and some of the mixed reactions it generated:
“Having Zillow, Redfin and House Values in the same room at the same time was the reason I decided to attend. Not necessarily the speakers themselves, but the companies they represented.”
“I was expecting to hear about more revolutionary technology. It seems the real estate industry is still in the technology dark ages.”
“The topic was “The New World of Buying and Selling Real Estate”. The moderator and the audience of R.E. agents didn’t allow for a real discussion on the future because they feel so threatened by these new technologies. Boos from the crowd of R.E. agents and a moderator who encouraged it stifled an open and honest discussion.”
“It is difficult for businesses to share the future directly as competition is present and they cannot release product plans before they are ready to launch.”
“It was good to hear the stories on the companies’ background and how they work. Although, at times it almost seemed as though I was at an infomercial.”
“Great topic; always fun to hear the spirited discussion that an industry in transition generates.”
All of the above once again proving that it is very difficult to satisfy all of the people all of the time, and that divisive subjects generate divisive reactions. It would be fun to do this again a few years from now, when more of these companies are bigger, and public, and have more visible business strategies.
So now I get to put in my nickel comments, based on my own background as a tech exec, seven years working with the MIT Forum on these kinds of programs, and now full-time realtor for several years. I think that this is an industry in the very early stages of being hit by disruptive technologies and the new business models that they enable. The mass and momentum of the industry are huge, and the consumer market is highly diverse. It may take quite a while for the new business models to clarify and engage their target segments of the market and start to get real (no pun intended) traction. The players we see today may not be the players of the future (for example, see Dustin’s earlier post about Google Base vs Zillow). But some will get traction, and as they do we will see a lot of resistance and delaying actions by those whose market is being disrupted. Some resistance will be tightened corporate policies, some will be PR campaigns, and some will be lobbyist-driven regulation. Anything sound new here? We’ve seen it in industries as diverse as airlines and telecoms and travel and books and so on … Delaying change is worth $billions to the incumbents, and they are pros at the game. But it still looks to me like the technology train is on the tracks, and gathering speed. Personally, I will take every advantage I can of the technology-driven changes… and I will continue to welcome ‘old-fashioned’ people-driven referrals 🙂
Brief overview of the event…
Moderator:
Panelists:
Jim did an excellent job leading the discussion. I didn’t take notes, but in general the questions were all pretty predictable and the answers were spot on… With an exception of a “woman-related” comment by Nikesh, no one made any major gaffs, and there were no real surprises… But that is not to say the event wasn’t informative…
My initial reaction is that the four panelists did a wonderful job and all represented their companies well. I’d even be willing to go further to say that they personified their respective companies. As in:
Nikesh had a hard time sounding real and often ended up sounding like he was recording an infomercial, which is (for better of worse) my picture of HouseValues.
David made some great points, but came off at times like he hadn’t completely thought through his business model. I wish Jim had pushed him to answer the question: What if a listing agent refuses to show one of your buyers a property? Or better yet, what happens when that listing agent who DOES show a Redfin buyer a property and then sues Redfin claiming they were the procuring cause of the sale. Talking about this issue, I wish someone had pushed either Gordon or Jim to answer if they would knowingly show one of their listings to a buyer who openly said they were going to use Redfin. Agents out there: Would you?
Spencer played the role of beta tech guy. He obviously understands the real estate industry and no one really forced him on any issues so he kept from saying too much of interest (like: What comes next?).
Gordon played the role of elder experienced broker really well. He obviously knows the industry inside-and-out, and considering his interest in technology (he is also a Director at Zillow), he came off as someone willing to explore new business models.
If you were there, what was your take on the MIT Forum? Did you learn anything new?
UPDATE 1:
Niki from HouseValues has a collection of interesting reflections on the forum…
UPDATE 2:
Spencer added his thoughts on the MIT forum (and a few other conferences he’s been to recently) on the Zillow Blog.
(Editor’s Note: I few weeks ago, I sat down with Chuck Reiling to discuss an MIT Enterprise Forum he is helping to organize that will feature leaders from some of the top real estate technology firms. His excitement at the idea of bring people from Zillow, Redfin and HouseValues together to discuss the future of real estate was obvious and contagious. Hence, I asked him if he would be willing to give some background on the project, which led directly to this post. Interestingly he’s not the only one who is excited about this forum as he the story was already picked up by both Robert Gray Smith and John Cook. Chuck and his wife are local RE/MAX agents.)
There’s been lots of local and national press lately about new online real estate offerings like Zillow and Redfin. With lots of investor money moving into the arena, we know there is change afoot. The question is, how much change, and for whom? Change for the consumer? Agents? Both?
As Ardell described recently in her “History of Real Estate” articles (Part 1, Part 2 and Part 3), the residential real estate business is always in a state of change. Ten years ago the online MLS systems caused a lot of change. The listing books got thrown away, and a few agents who couldn’t adapt went with them. Then the MLS derivative sites started appearing, with MLS download data becoming available to the public. People could start doing their own online searches without having to call an agent, or cruise the streets on Sunday afternoon looking for open houses. So change is ongoing, and maybe there are only a few real (no pun intended) points of stability.
My daddy and my uncle were both brokers years ago. The only points we still have in common with their businesses seem to be clients, agency law, and the For Sale sign in the yard; almost everything else has changed. For a long time, ‘public’ records in boxes in warehouses were not very publicly accessible for most of us, but government agencies (state, local and federal) are rapidly putting their public records information online to support their operations, and incidentally help us too. And new services like Redfin, Zillow and House Values make that data even easier to use in support of their own business models. As we see locally, the big four real estate companies, Windermere, Coldwell Banker, John L. Scott and RE/MAX are also exploiting that data in conjunction with MLS data on their sites. None of this has changed the basic business model of professionally assisted transactions with buyer and seller agent commissions. While the traditional model has been a subject of debate for a long time, and a lot of creative alternative business models and offerings have been tried, the industry is still seems to be running on business as usual.
However, there is also a lot of technology-driven change right now. Someone with a background in the high-tech industry might observe that real estate looks like just one more industry about to be disrupted by the Internet – changes caused by dramatically improved information availability, rapid communications and online business models. But residential real estate is still dominated by local interests, its product is both expensive (understatement) and unique, and there are a lot of local and national consumer protection laws on the books – some good, some bad, and more coming. So who is right, and what will happen next?
To try to pull together a picture of the impact of these changes, and where they might lead, a local organization called MIT Enterprise Forum is focusing one of its dinner programs on the topic of Online Real Estate (clever title). The Forum focuses on highlighting business issues and opportunities for tech-driven companies and entrepreneurs. The Online Real Estate program will be on Wednesday, March 15, at the Bellevue Hyatt Hotel. See www.mitwa.org for program details and reservations.
These MIT Forum events typically draw 200 to 400 attendees, and this one will probably be on the larger side. For better or worse, it seems like everyone is interested in real estate these days. The program will be panel-based, with a traditional real estate broker, a top online agent and execs from Redfin, Zillow and House Values, with an open Q&A session at the end. I’m on the program team that is pulling the program together, and I’d have to say I expect a very lively conversation on the stage that evening. 🙂