[photopress:the_sky_is_falling.jpg,thumb,alignright]Where have we heard that before? I thought I would share with you some historical comments in the media made about real estate by financial “experts
The Sky is Falling! The Sky is Falling!
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Tag Archives: real-estate
My inspiration for this week: Hamoody
Life in real estate. Good days, bad days, good weeks, bad weeks. When things get a little bit crazy, what picks you up? A few weeks ago I mentioned that inspiration is everywhere, if you let it in your world.
My inspriation was someone who I read about, but today, I got to see in person. A remarkable story. An amazing boy.
Be sure to click on the photo’s.
What will a market slow down do to discount brokers?
One of the reasons I became a real estate broker and started a RE company was because I felt 3% across the board was not right. Using capitalism, over the past 100 years as a guide, real estate will move away from the % model to a more competitive flat fee for service model. Speaking of Seattle in general, a 750k house is not worth $7,500 more in commission than a 500k house. Of course there are special circumstances, but on average.
The mood is changing in real estate. Greg Swann talks about some changes in the industry as a whole in his post here. The real change will come as full service agents become more and more aggressive for business. The slow down in the housing market will surely result in a long over due change in the traditional real estate commission structure. Following the typical paradigm shift, prices decrease, while customer services increase. This means ‘No Touch’ discount brokers will have it rough down the road. As more agents offer their services at competitive prices, discount brokers will loose their appeal.
I do not want to pin point any specific discount brokerages, but in the past week I have noticed two well known discount brokers signs taken down and replaced by reputable full service firms. Discount brokers are stuck at a flat fee with zero customer support (AGAIN… on AVERAGE).
The big question is, “Would the average buyer/seller rather pay a bit extra for a live body than an 800 number to call? “ Time will only tell, but in a service industry, price is never the deciding factor!
| UPDATE: I have received an unusual amount of personal emails about this post. I would like to reiterate my reason behind this post was to show the real estate paradigm is shifting. My purpose WAS NOT to challenge the value of an agent or was I trying to make agents defend their side of the story (I am a broker so I guess mine too). My purpose was sharing my view of the future and what will happen. |
Famous Real Estate Agent Found Dead
Linda Stein, a New York real estate known as “broker to the stars,” was found dead, apparently bludgeoned to death in her Manhattan apartment.
[photopress:Linda_Stein.jpg,thumb,alignright]Her body was found on Tuesday by her daughter but the cause of death was not confirmed until an autopsy Wednesday. Linda lived by herself. The building featured heavy security and there was no sign of forced entry or robbery. Reports say that all people entering the building use the elevator and there is an elevator operator. Officials have not announced any motives or suspects in the case.
Linda was the ex-wife of Seymour Stein, former president of Sire Records, which was the launching pad for the Ramones, Talking Heads and Madonna.
Before real estate Stein was a pivotal figure in the early New York punk scene, co-managing the Ramones with Danny Fields, and was a friend to David Bowie, Talking Heads, The B-52s and Madonna as wife of Sire Records founder Seymour Stein.
Her career continued into the world of expensive real estate, as she brokered property deals for stars like Sting, Billy Joel, Harrison Ford, Rolling Stone editor Jann Wenner, LaToya Jackson, Sylvester Stallone and Andrew Lloyd Webber, amongst others.
For many local Seattle-area agents this brings up painful memories of Windermere agent Michael Emert who was murdered in January 2001 in a Woodinville home listed for sale. Mr. Emert was showing the home or previewing it for a buyer at the time of his murder. Mr. Emert’s body was found by the seller, who is represented by another real estate firm and was a stranger to Mr. Emert. Police believe that Mr. Emert’s late-model Cadillac SUV was taken by the perpetrator and later abandoned in Kirkland. As far as I know this murder was never solved. But it caused a major change in many agents behavior when meeting prospective clients and help inspire SKAR‘s (Seattle-King County Association of Realtors) “Safety Week
Inman is Lead Investor in Curbed…
Congrats to Lockhart Steele for getting an infusion of cash ($1.5M to be exact) to expand Curbed to new cities.
In reading the NYT’s coverage, nothing really surprised me much until the last two paragraphs where Brad explains why he is one of the investors:
If the downturn lasts long enough, “everyone suffers,
I have no intention of turning this into…
a blog about southern California real estate, but I do have a non-fire related update from Southern California.
Brad Inman and I are going to be speaking at Beverly Hills REALTOR Association’s Head of High Office Tea this Thursday afternoon. From everything I can gather, it is going to be a pretty posh set-up at the Peninsula Hotel. The plan is for Brad to speak about the status of the industry for about an hour, myself to speak for about an hour and tea and conversation making up the last hour.
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Tickets are $40 and just about sold out.
Also, I shouldn’t admit this, but I honestly have not given much thought about what I’m going to say just yet… Conveniently, back in August I did a presentation on using blogs to build up an online brand for the KW Mega Technology Camp that came off well (and took about 45 minutes including questions from others who were on stage). I think I’ll adjust that presentation a bit but go with that general outline. If anyone who was at that presentation wants to give me feedback, I’d love to hear it! 🙂
Private Money Loan Recommendations?
I had someone email me an interesting question recently:
I had a quick question about private money loans. Have their been any posts on this? I tried searching “private money”, “hard money” but nothing came up. I’m looking into rehabbing a house and conventional lending isn’t going to work for me, so I was wondering if there are any recommendations or guidelines for obtaining private money?
The closest thing I can remember is a site called Prosper (I wrote a note about it) where people can loan other people money. However, I’m almost positive they are geared toward small loans like paying off credit card debt, so I don’t think it would help for home remodeling projects. Also, when I did a bit of searching, I see Brian Bradu covered the topic of private money loans a little while ago, but his angle didn’t include any guidelines or recommendations for finding a private loan.
Is this a common thing? Is there a good source of information for private loans? My gut says that most private money loans are probably among family/friends, but I wouldn’t be surprised to learn that there was an existing market for this kind of thing.
Social networking around geography
Last week I was asked to speak on “Public Engagement Through Web2.0” at the annual conference of the California Chapter of the American Planning Association (APA).
It started with a request from Eric Fredericks, the guy behind the Walkable Neighborhoods blog, who I’ve known (and liked!) for quite a while now. I’ll happily admit I wasn’t exactly sure what to expect out of the crowd of planners, but I was someone excited since I spent seven years employed as a transportation planner and only asked to speak AFTER I left the industry! LOL!
The theme of the talk that I gave was on trying to understand how social networks can be built up around the concept of geography because I see it being a unique item that links both city/transportation planners and the real estate community. While most social networks are organized around friends (think myspace) or a shared experience (think facebook), the idea behind the communities that are most relevant to planners and real estate agents are rooted in geography…
What surprised me the most was that the questions I was asked during the Q&A were almost exactly the same as I get asked during the seminars I give for agents. Questions like How do you moderate comments?, How do you attract an audience? and How much time does it take?
However, there was one question I’ve never heard from a real estate audience, but I think it is an interesting because it forced me to think a bit differently about access to the real estate website. Essentially, a planner from a local government agency asked: If we set up a blog to communicate to our constituents, how do we reach the 30% or so that do not have access to the internet? I didn’t have a good answer for her (and I still don’t), so I’m glad that I kept quiet and let Eric give an answer. Nonetheless, the idea of being concerned with “full access” is not something I’ve spent a lot of time thinking about since my initial angle with this site was much more geared toward hitting the tech-savvy few!
I ended the talk with the concept that we’re not far from a day when our online social networks could have a very useful geographic element to them that could be of use to both real estate professionals and city planners. And while I can’t claim to know what that social network will look like, I look to Google Earth effort to bring avatars akin to Second Life and companies who are bringing in real-world experiences in Second Life for clues… Maybe we’ll hit the sweat spot of “web3.0” when Google replaces our mobile network with gPhones… 🙂
Redfin on Guy Kawaski's Blog
[photopress:guy2_0_1.jpg,thumb,alignright]Over on Guy Kawasaki’s Blog “How to Change the World – A Practical Blog for Impractical People”, Glenn Kelman of Redfin posts their Actual Numbers against “The Redfin Model” figures in a post titled “Financial Models for Underachievers – Two Years of the Real Numbers of a Startup”
Seems the model is based on worst case scenario, to increase the odds of repeated rounds of funding. Glenn says: “…we heeded Guy’s advice that ‘the three most powerful words you can utter at a board meeting are, We beat projections’. This convinced us to develop the worst possible financial model that could still be used to raise money.”
Hmmmm. So you set your sights artificially low, so you can say you beat projections when asking for more money. Had the sights not been intentionally low, maybe there wouldn’t be a new round of funding. I guess that’s a strategy. But it sounds a bit deceptive, doesn’t it?
Surely people spending lots of money, aren’t totally awed when someone says “We beat projections!”. One would hope that they would first ascertain if those projections were intentionally placed at worst case scenario, just so they could say “we beat projections!” to get more money. One would think investors on a grand scale are a little smarter than that…or at least we hope they are. But looks like Guy and Glenn know for fact that they are not, and are capitalizing on that fact.
It really is a great article, and Glenn is offering sanitized versions of the model for others to follow. But if people looking for money can read this and use that model, wouldn’t the people handing out venture capital also be reading this? Wouldn’t they in turn learn to scoff when someone says the magic words: “We beat projections!” again and again?
Yup, it’s “A Practical Blog for Impractical People” alright. Sounds like the practical people are the ones asking for money, and the impractical ones are the people giving the money.
Other blog posts commenting on Guy Kawasaki’s post:
Sneak a Peak Inside Redfin by Joel Burslem on FoREM
Nick Bostic on Radiohead and Redfin (not quite related, but cute and noteworthy)
Tim Berry of Up and Running quotes the quote “Plan slow; Run fast”
I interrupt the regularly scheduled programming…
to bring you this video interview by Joel from Inman Connect. While I talk too much and too fast, some of you might find it interesting to hear a bit about the history of RCG as well as some more details on the idea of “linkation“…
Now you can go back to your regularly scheduled programming…