Tag Archives: information

Buying wisely in any market

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[photopress:seg.gif,thumb,alignright]I find that most people who track countywide stats, looking for bubbles and market trends, are not people who are buying and selling property. Anyone who is actually buying or selling property knows, that countywide stats tell you both everything and nothing. It is in the small subsections of any given market that you will find the information you need to make wiser choices.

For instance, can you really compare ramblers built in the 60s to newer housing choices? Can you compare “too small for anyone” condos of 400 square feet, to the saleability of 2 bedroom 2 bath condos? Lumping everything together tells you nothing. Houses on busy roads, for example, will not sell as well, and will sell worse at times like this when buyers are being more cautious. I think of houses on busy roads when I hear comments like, “The market is getting weak! I see more and more for sale signs every day while driving to work!” Well let’s assume that most people do not drive on quiet 25 mi. per hour residential streets when driving to work. So what they are seeing is the weakness of properties situated on busy roads, not the market in general.

A good example is tracking newer townhomes, in the $300,000 to $500,000 range, within 3 miles of Microsoft. This is a market segment that is driven by its own forces and outperforms the market in general. In the last six months there were only 21 townhomes sold, built since 1990 and within 3 miles of Microsoft, between $300,000 and $500,000. Of these 21, 16 sold AT or better than full price in less than 30 days. Several in less than 10 days and most in less than 20 days. At the moment there are only 3 available, all on market less than 15 days and two at less than 5 days on market and there are 3 in escrow.

So of the total six month inventory, you can expect four to sell per month and there are only 3 on market, two of which have only been on for two days and three days, respectively. Those are some pretty strong market stats. What are the odds that these will start dwindling on market for excessive periods of time or go down in price? Slim to none. Making offers on this product, based on what you are reading about the King County market in general, would make no sense whatsoever.

So Chicken Little, maybe the sky IS falling for older ramblers built on busy roads with only one bathroom. But conversely the sky is still the limit in newer townhomes for sale within close proximity to Microsoft. There’s a whole lot of varied stats in between. Make sure you are making your choices based on the product and market segment that YOU are considering buying. Buying the biggest “bargain” on market, could lead you into buying in that segment of the market that will not appreciate, and will be difficult to sell later for at or more than what you paid.

Permeating Self-Promotion

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Here’s a few stories from around the real estate blogsphere I found interesting…

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Phil is obviously have some fun in Boise, although others may find his anatomy of a listing he won’t take more relevant to recent RCG conversations…

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Jonathan sends out a blogger’s prayer and some really nice words about RCG.. Thanks!

Fortunately, I ran into Ardell DellaLogia, her blog, and the Rain City Guide. Between her advice and her blog, and the larger Seattle based blog to which she contributed, I got a sense of what a blog could be – articulate, meaningful, educational. And that’s what I decided I wanted and what I’ve strived for, with mixed success.

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The xBroker is clearly and definitely over-the-top. Yet, despite the self-promotion that permeates all of his posts, I really like this guy. In emails and blog posts, he’s come across as someone who is definitely informed and wants to communicate his knowledge… There’s definitely a there, there…

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Tech alert: Greg Linden turned me on to a very interesting post by Google’s Steve Yegge, where he looks at the management of Google through the lens of the Agile programming philosophy. The story would have been good enough, but then Microsoft’s Dare Obasanjo made it better by comparing the ideas to the (failed) management structure at Enron… All three posts are worth reading (but make sure you have some time!).

Buyer Agency Agreements

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[photopress:dog.jpg,full,alignright] Is there a difference between dogs and cats? When you take out a leash, a dog usually gets all happy because he knows he is going to go outside. When a cat sees a leash he usually has the opposite reaction (some exceptions, of course) and says, no way I am going to be LED anywhere!

So what do dogs and cats and leashes have to do with consumers signing contracts?

For many years, agents have insisted that the seller sign a contract for their services, and by and large sellers have been happy to do so. I have never had a seller say, “Can’t you just do what you do, without my needing to sign a contract?”.

A seller is more like a dog than a cat, and a contract is somewhat like a leash. Most dogs are more than happy to be on a leash, as long as the guy at the other end of the leash, keeps pace with WHAT THE DOG wants to do.

The reason it is not possible to represent a seller client without a contract, is because of the “3rd party” promise to pay. The seller via that contract and the seller’s broker, agree to pay the agents who show the property. Say I list a house at $500,000 and the “seller” offers 3% “in the mls” to the Buyer’s Agent. That’s $15,000. While it may appear on the outside that the seller is offering that money to the Buyer Agent in the MLS, he isn’t. The buyer agent is an unknown person and the buyer is an unknown person, at the time the property is entered into the mls. The seller is not putting anything in the mls, the seller’s agent is putting it in the mls and promising to pay the buyer’s agent. The agent would actually have to cough up that $15,000 from his own personal funds, if he didn’t have a contract signed by the seller at the time he put the “offering” in the mls. That’s a little too much to ask of anyone on a handshake, so a contract is required from the seller.

Back to sellers are dogs and buyers are cats. The seller has a known address to the “product”/the house. It is easy to get a list of “services and metres” specific to that house. Does it need some staging? Is it photo ready? Can we get 15 photos quickly after it is staged and edit and upload them…on and on. Specific defined things after viewing the product/house, based on that house’s strengths and weakneses. Pretty simple stuff to calculate from day one, for the most part.

Buyers on the other hand are cats. They do not know “the address” of the property at the outset. They sometimes do not know for certain whether they will be buying a brand new townhome (not as much work for the agent) or a single family home built in 1910 (lots more work for the agent). They sometimes don’t know if they are going to buy in Renton or in Juanita or in Greenwood. Sometimes they need to see some property before making some of these decisions.

So a buyer needs to roam freely a bit, without a leash, more like a cat, to gather the information needed to come to an informed decision regarding type of property, general location of property and ballpark price of property. A buyer may need to see property with an agent in Renton, a different agent in Juanita and a third agent in Greenwood, before having enough information to hire the right agent for their needs. Anyone who has been in this business for awhile, knows that they are sometimes a stepping stone, in a buyer’s journey to an informed choice.

The absolute worst thing that can happen in this country, IMNSHO, is for buyers to be required to sign a contract, just to SEE a house. First of all it is demeaning, and lacks the respect and understanding of the industry, and its differences. It’s trying to put a leash on a cat, and pretending the cat is a dog.

Top 10 List of Real Estate Lists

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That’s right, I’m going meta-meta. Or better yet, I’m going mega meta (unlike Greg who went mini meta! 🙂 ).

  1. Hanan’s irregular list of new real estate blogs. Beautiful idea, perfectly executed. It is interesting to note that almost none of blogs from his first installment are still around writing interesting content…
  2. 10 Best Women Bloggers. Because it matters.
  3. 3 Easy Steps to Stop Zillow from Publishing the Zestimate of your Home… Because it doesn’t matter (and it still generates a ton of hits).
  4. Curbed’s Broker Boys and Babes Contest. No one else could have done this right.
  5. Curb Appeal Enthusiasm. Simple. Relevant. Useful. Interesting.
  6. 21 reasons to bank on the Phoenix real estate market… Should serve as a great warning to agents writing about the bubble… Be prepared to take the issue on like Greg or don’t even go there… (and I simply can’t ignore his list of blogs that feed a hungry mind.)
  7. The consistently growing list of neighborhood videos from TurnHere… I’m addicted.
  8. The PMI Group’s list of cities with the riskiest housing market. (This is a personal favorite since they traditionally rank Seattle as one of the least risky places to invest in real estate.
  9. Another ego item for the list… I check out the technorati site multiple times a day to find out if anyone is linking to RCG. But technorati provides so much more like keyword searches of blog posts and keyword searches of blogs. I similar argument could be made for del.icio.us since it is so darn useful for finding good content!
  10. Ardell’s list of posts for buyers and for sellers make up an incredible, wild, colorful, useful list of content.

And the worst real estate lists?

  1. I have only one: PubSub. This great concept is in desperate need of some algorithm love. For starters, if they are not going to count blogrolls each day, then they have to be consistent. For example, the Seattle PI Real Estate blog shows up #1 day in and day out because PubSub thinks that all the PI blogs are giving a fresh link to PI Real Estate blog every time they post a new blog entry. In reality, it is simply a function of their blog being on the blogroll of all the PI blogs. In addition, many features (like their URL detail page) have been broken for most of their existence. Lazy-coding issues like this make their tool nearly useless.

Why isn’t my house SOLD yet?

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You have to be in the top three of your “price tier”. Being at the high end of your “price tier” is better than being at the bottom of your “price tier”.

Photos must all be good photos and must be ordered in “hook order”.

Stop looking at what is for sale and stop looking at the comps once your property is listed for sale. If you have a lot of showings and no offers, then it is something AT the property that is causing it not to sell and you are a “bounce point”. If you don’t have enough showings it is something in the mls that is causing it not to sell, unless you HAD a lot of showings at first and dwindled down to not enough.

That’s pretty much it, pretty simple to me, but let me explain some of the lingo up there.

A “price tier” is the increment of value pre-supposed by the public websites. Go to Redfin or Windermere or John L. Scott or CBBain sites, and look at property in your area similar to yours. The site forces you to put a range of value that the site itself predetermines. The lower the price, the more important this is. Let’s look at the $250,000 to $300,000 crowd. If you are $259,000 or $276,000 or $309,000, you are “off”. The site forces people to look at $250,000 to $275,000 and $275,000 to $300,000.

If you are priced at $259,000 you are missing the people stretching up. Let’s face it, almost every single buyer in this price range “stretches up!” as in “I want to spend $250,000, but will go as high as $275,000, but NOT a PENNY MORE! By pricing your property at $254,000, you miss the boat on the $225,000 to $250,000 crowd and don’t compare well enough for the $250,000 to $275,000 crowd. $254,000 is just past the point where someone stretching up will see you at all and your property is not comparing well to those in the group at higher prices. $309,000 is just a KILLER price…the first number being the ALL IMPORTANT one. The difference between $240,000 and $249,000 is nothing, but the difference between $299,000 and $301,000 is a KILLER!! (An aside to agents here. If you are at a listing appointment and the seller insists on pricing at $301,000 instead of $299,999 or $300,000 straight up, LEAVE, RUN! It means “I don’t really want to sell this place, I’m just appeasing my ___ and pretending to be selling it.”

I could write a chapter of a book on “price tiers” alone, so let’s move on to photo “hook order”. Photo #1 is all important as many sites (like Realtor.com last I looked) require the user to click another button to get past photo #1. If photo #1 doesn’t grab them, you are dead in the water, and they are scrolling down past you.

Unfortunately mls rules hinder the seller when it comes to photo #1. There are a few rules written with agents in mind that I do not agree with, and this is one of them. Why should the mls REQUIRE that this all important key photo be…??? Seller should have more freedom in that regard. According to mls rules, photo number one must be an “exterior” shot, preferably the front door area, so agents can more easily find the property. Lame rule in my opinion if the curb appeal is NOT the seller’s claim to fame. All mls services should change that rule yesterday, giving the seller the opportunity to put his best foot forward, regardless of what constitutes each seller’s best foot. In condo complexes it is a KILLER rule. Who the heck needs to see another shot of the outside of a big condo building. Ever wonder why you see 25 shots of the same photo on a new construction project? Looks pretty dumb from the user’s perspective…but….it’s a rule. If the interior is a slab granite knockout and the exterior is 1977…this rule KILLS a seller and the mls is wrong, wrong, and wrong again for making the seller put the 1977 exterior as photo #1 vs. the knockout new kitchen. Let’s all fight for that change…or Robbie, can you reconfigure the photo order on an mls feed???

Hook Order – think attention span. Once you get past photo #1 issues, the second photo must be your absolute best of the rest. Forget about the “virtual tour” concept where you have the buyer “walking in from the front door”. If your claim to fame is your fireplace and kitchen, get those into the #2 and #3 spots. Make a list of your selling points in order or priority. If #1 is new kitchen, #2 is fireplace, #3 is double sinks in master bath…show the photos in the order of the priority of your selling features. If your #1 claim to fame is a jacuzzi in a cheap condo, don’t be afraid to put that jacuzzi as photo #2. Every picture in sequence, is a hook, as buyers often say “no I don’t want to see that one” after seeing photo #1 and #2. Having your best selling features at photo #11 and photo #12??…think about it…common sense rules.

A small note about the number of total photos. Max allowed is 15. Always use max if possible. That DOES NOT mean I want to see the open toilet and the toilet paper. It means take your best features from varied angles. Don’t be afraid to be redundant with regard to your very best selling points, but mix them up. Put it at photo #2 and #3 and bring it back to emphasize the strong selling features at photo #11 and #12, but from a different perspective as in #2 is kitchen from kitchen and #11 is kitchen from dining area.

This is getting way too long and I have things to do, so let’s just brush over the last point. If I could crack open every agent’s brain and slide in a little microchip, it would say STOP LOOKING AT THE COMPS AFTER THE PROPERTY IS LISTED FOR SALE! You look at the comps to determine your opening price out the gate, that’s all, DONE, finito!! No showings…wrong price. Plenty of showings but everything is selling but yours…condition problems. DO NOT even MENTION the sold comps once you are out the gate…irrelevant data.

And if I had nickel for everytime I heard an agent say, “I don’t know what’s wrong? We’re the ‘best game in town’ given what is for sale.” Face it…they are going to the next town, because you are an overpriced dog, regardless of the fact you have no competition in YOUR complex. What else can they buy for THEIR MONEY is the order of the day! Of utmost importance with one level condos. Buyers come in waves. “Surfing the net” is not just a catch phrase.

In the low price range the buyers are currently renting and have nothing to sell. If they don’t like what they are seeing in their price range, because the cream has been skimmed off the top, they wait for the next wave of new inventory. Your wave has crashed and your board is floating out to sea.

Buyers pay attention to these rules, and go grab all of the stale ones who aren’t following the rules, by offering them eighty cents on the dollar. Go for the $309,000s, on market for over 60 days, with only two photos, photo #1 being the sign with the name of the condo complex on it 🙂 and search for the “pick of the litter”.

Instant Real Estate Gratification

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[photopress:sasha_skyping.JPG,thumb,alignright]Our operators are standing by ready to take your call!

Here at Rain City Guide, we do our best to answer your questions before you ask them (at least that is a major part of good blogging!).

However, I know that we’re barely touching the surface of answering all your Seattle real estate questions and I doubt you want to wait around until we write a blog post about what’s on your mind right now. So, today, I’m releasing an “instant gratification” feature!

Notice how a few of the contributors (on the right panel) have a button under their name that tells you if they are online… Every time you reload a page on Rain City Guide, my server goes out and checks the status of these contributors. If they are online, then making contact with these contributors is simple, using free software called Skype.

So far, I have four RCG contributors who have agreed to take part in this experiment:

  • A Real Estate Agent (Anna Luther)
  • A Real Estate Lawyer (Russ Cofano)
  • A Mortgage Broker (Russ Shulman)
  • A Real Estate Tech Guy (myself)

I’m not sure what I have to offer via this medium, but if you want to talk with an agent, a mortgage broker, and/or a real estate lawyer, they are available to talk with you any time they are online. (By the way, we’re not going to stop here as more RCG contributors should be coming online soon…)

Contacting any of us is very simple and if you already have Skype, you can skip the first step:

  1. Download and Install the Free Skype tool
  2. Return to Rain City Guide and click on the button under anyone whose status says “I’m Online” and/or “I’m not telling”.

This will bring up a pop-up menu that starts the process of calling us over the internet.

Why Skype?

  • It’s free! Anna has been using it for almost a year to talk with her friends and family in Russia (Here is an article she wrote about Skype last September.)
  • The quality of the calls are awesome! They are much better than a cell phone and akin to a land-line.
  • No fancy equipment is needed. Assuming you have speakers and a mic on your computer, it just works. Honestly. I’ve set it up for friends and family on five or ten different computers, and assuming they have a mic (every computer has speakers nowadays), it has worked immediately after installation. Note that even if you don’t have a mic, you can still use Skype to send instant messages, so still consider using Skype to contact us…
  • Did I mention it is free? Skype will cost you nothing and there is no spyware or anything nasty in the software, so go ahead, download the software and start making calls to friends and family around the world.

One last note… The status of some of the people is displayed as “I’m not telling” which is just no fun. The reason is that the status of Skype users can only be displayed on a website if they are connected to Skype through a PC. Anna and I are using a Mac. Nonetheless, I’ve included these buttons because you can still use them to contact us. Assuming I’m online, I’ll definitely answer your calls. Assuming I’m not online, I pay Skype a few dollars a year for voicemail service, so you can always just leave me a message.

[photopress:little_skyper.jpg,full,centered]
(this is a photo of our daughter using Skype to talk with her grandparents in Russia!)

UPDATE:

I added both Ardell and Galen (and two more contributors said they were hoping to join up soon)!

I also had some great questions from people about how Skype works. The system is essentially the same as a telephone conversation except it is over the internet. If you call up one of the contributors, you will be talking with them and only them. You are not entering a group conversation, a group chat, or anything like that… It will really just be you talking with them. Simple, but powerful!

Gone Wiki

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A little less than a month ago, I released the Rain City Guide Wiki and I’ve been very impressed with the results so far… I’ve had quite a few local real estate professionals add themselves to the (free) directory that I’ve set up and even a few, like Grier Smith and Chuck Reiling, add their own pages.

Interestingly, I figured it would take some time before Google caught up with the wiki site, but I’m pleased to say that it really didn’t take much time at all! A search on Chuck’s name shows that the wiki page he created for himself is the number one result, even above his writings on Rain City Guide, which kind of surprised me.

[photopress:wiki_screenshot.jpg,thumb,alignright]Because creating a page on the wiki is as simple as putting text in brackets: […], it seems like a no brainer for real estate professional who want to kick start their internet exposure. All you have to do is add your name (in brackets) to the Seattle Real Estate Directory. After you save the page, you will be prompted to create your own page where you can write about yourself and add photos to your heart’s content.

However, I think the real benefit of the wiki will come as people fill in more details about the home buying process. Grier did a great job starting up the discussion with a page on the Home Buying Process. If others are interested in adding to his description, editing the wiki page is as simple as clicking on the link that says “edit this page”! And if you are making a meaningful contribution, I highly recommend you add yourself as a source!

Here are some of the areas of the wiki that I’ve put some time into updating recently:

  • Innovative Real Estate Search Sites. I get a steady stream of emails from people who want me to add their new real estate technology site to my list of innovative sites. My latest response is to say “feel free to add yourself to the wiki page because I’m in the process of moving the list over there anyway!” On the wiki, each innovative real estate site gets their own page and I’ve added lots of cross-links making it easy to see connections between companies. There is still lots more that could be added, so I welcome your contributions!
  • Seattle Real Estate Blogs. This is another wiki page I feel pretty good about because I’ve seen a bunch of local real estate bloggers add their sites recently. I keep learning about new sites thanks to this page!
  • National Real Estate Blogs. Similar to the Innovative Real Estate sites, whenever a blogger emails me asking to be added to my blogroll, I send them to this wiki page where they can add their own site. After I complete adding all the real estate blogs that were already in my blogroll to the wiki, then I’ll completely move my blogroll over to this wiki page so that I don’t have to do any work at all! 🙂

I’ve definitely gone wiki, and if you care to join, it can be a lot of fun!

What a week!

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[photopress:view_of_santa_monica.jpg,thumb,alignright]My family and I spent the past week scoping out appropriate neighborhoods in Ventura County! No matter where we choose to live in Southern California, it will definitely be a major change from our way of life in Seattle…

As I spent most of the week away from the internet (I did have a BlackBerry, but that doesn’t really count!), I’ve fallen way behind so I’m going to play a quick catch up here by mentioning a few of the things that have caught my eye this evening as I returned to the web:

  • Dan Green, ofThe Mortgage Reports Blog, let me know that Rain City Guide received at least one nomination for the Most Innovative Real Estate Blog. Very cool! Thank you Dan!
  • There has been some buzz around a new real estate blog featuring a large group of real estate professionals. I look forward to following the site…
  • I received emails from people at both Zillow and Move on how to better use their systems to find appropriate neighborhoods, so I’m going to have to revisit my post on the home buying process.
  • Ardell published a great article that has been very well received by other bloggers!
  • For the first time since the inception of RCG, I’ve not read EVERY single comment that has been posted on RCG! AHH!!! I’ve got some more reading to do! And on a very related note, my inbox is over-flowing with emails that are worth a quality response, so don’t be surprised if it is taking me a while to respond!

Adding Some Sun to Rain City Guide

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I’m extremely excited to announce that I’ve accepted a position with Move (HOMS) as the Director of Consumer Innovations.

Until recently, Move was known as HomeStore and they (we!) are the people who run Realtor.com, HomeBuilder.com, RentNet, Welcome Wagon, and a few other sites… The idea behind the Move brand is that we’ll be creating a one-stop-shop for connecting consumers with comprehensive real estate information and expertise.

No surprise that this will be a huge change for me and my family. Not only are we moving to Southern California, but I will now have some actually time to spend pushing the boundaries of online real estate technology (I’m no longer a transportation engineer!?!). What a difference a year of blogging can make!

I imagine that there might be a question or two I could answer about this change, but I’ll save the answers to what? why? how? and when? for future posts.

What to Look For In Your Real Estate Blog Stats

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I’m sad to report that we weren’t made an unbelievable offer for RCG, and we have no plans to change our name to either “Google’s Rain City Guide” or “Rain Zity Guide”. 😉

And now that it is April 2nd, I thought I’d get back to work by giving some advice on what to look for in the stats of your business blog.

It can be useful to know answers to questions like: Who is visiting my site? Where they are coming from? Am I giving them what they want? And (assuming you’re running a business blog), is anyone buying the product/service that I’m selling? To get at these answers, I turn to one of three different stat programs (all of them free!):

  • awstats came installed by my internet service provider (ISP) and offers the best look at long term trends for me because I’ve had has been running the entire time I’ve had RCG. It always shows slightly higher stats than the other programs because it picks up everyone who visits the site and not just those who load the whole page and/or have javascript installed. For better or worse, my host only updates the awstats once a day, and they get aggregated by month so that I can’t really make head’s or tails out of what is going on “right now” using this stat program.
  • MapStats has some interesting features that make it very useful for blogging. It not only maps all of the users out based on their IP address, but it also let’s me know where the latest visitors are coming from (i.e. what links they clicked on and/or what search term they used to get to RCG). It is updated every few minutes making it very useful in seeing what’s happing in the hear-and-now.
  • Google Analytics is an amazingly comprehensive stat program that is probably better suited for sites 100 or 1000 times bigger than RCG (or at least sites that have a staff with time to pour over all the information it gives!). It includes tons of interactive charts and you allow you to reference and cross-reference by date and referrer (and ad program if you do that kind of thing). Like awstats, it has the disadvantage that it only updates once a day, and like MapStats it misses out on people who don’t have javascript installed and running. But the charts are amazing. To give you an idea of some of the things you can see with Google Analytics, I’ve included a chart of the “loyalty” of RCG readers:

[photopress:rcg_loyalty.jpg,full,centered]

(You can read the chart as saying “In March, 10,254 visitors came only once while 743 visitors have been to Rain City Guide more than 200 times.)

Interestingly, the loyalty chart reminds me of something said by Niki Parekh of HouseValues at the MIT Forum that has resonated with me. The topic was how real estate agent using HouseValues system have to be patient because it can take months, if not years, between the time when a home owner contacts HouseValues looking for a home valuation report and the time when when they are ready to sell their home.

The relevance to the loyalty chart is that I have this not-too-small hope that more and more of the home buyers and sellers who read Rain City Guide regularly will begin to take advantage of Anna’s referral service when they are actually ready to buy and/or sell a home. While a dozen or so people contacted Anna in March, there is still plenty of room for this service to grow, and I was glad to hear Niki highlight the importance of keeping a long-term view of things.

More Stat Fun
On a related note, I’d feel like I was hiding something if I didn’t give an update on our statistics at the beginning of the month (jan, feb). Here are the same two stat charts updated to include data for March:

[photopress:unique_visitors_march.jpg,full,centered]

[photopress:total_visitors_march.jpg,full,centered]

One last thing
And finally, Happy Belated Birthday to Merv’s blog in Virginia . If you want a little background on why Merv has been so successful at real estate blogging, check out the interview I did with him back in December.