Mar. 25, 2008 - A snippet from a conversation with Jeff Turner in early 2007

We have not reached the tipping point yet?

Ahhh...we have reached many points of tipping...

The (real estate) industry has about five main bullet points to address, and have already chosen how to address those to a large extent and over a period of say 15 years.  Their chosen course in each disappoints me, obviously.  Some are more problematic for me than others. Are these courses reversible?  More importantly, should I care if they are not reversed or moved forward differently?  Give me a sec.  I have to go ask Jesus.

1) Broker survival-compensation models (becoming landlords of cowboys.  The cowboys is my issue more than the fee structure.  Starting our own company was a huge eye opener though.  I see it...I get it...but I don't care much about the big picture of broker compensation...just the impact on consumers of the cowboys that structure creates.

2) Buyer Agency and all that goes with (disclosure of and negotiation of the Buyer Agent Fee i.e. Redfin.  I may negotiate at full price or more or less...but I never say the buyer agent fee is none of the buyers business...as "the industry" does.  That is why Redfin is the one and only and hated for it.  The buyer agent fee is not supposed to be any of the buyer's damn business LOL.  A huge host of injustices in the everyday market place lies herein...so it is my main focus.  It is also where the consumer's intelligence is highly insulted.

3) Consumer's disgust at the control and arrogance factor (you HAVE TO pay this and you HAVE TO use us and you HAVE TO...just because the industry has gotten away with way too much for way too long, is no excuse for this stance.  Be happy that you "made hay while the sun shined" and move in a new direction people.

4) Realtor.com is a monopoly, and by definition of monopoly, unchallengedly stagnant. Enter Zillow as the response.  You really have to admire Dalton for his Fearless Leader stance...ask yourself, why is Dalton defending Realtor value against Redfin?  Why wasn't it the CEO of another Brokerage.  Where is Dalton vs. Kelman not a match?  He has taken on that role...very wise man....defender of the Realtor.

5) Self Governed Trade Association The Big Kahuna has not met it's obligations that go with privelege.  It did forever...until...all agents stopped representing only sellers.  Their response to the change was to "pretend" change...not "good enough"  The world is rebelling...including the DOJ  And well they should.  Self governance to the point of Courts deferring back to the Realtor Organization, comes with HUGE public policy responsibility.  They blew it...badly...and have given no sign of doing anything but staying that course.  If the Realtor organization only looks out for the Realtor and not the consumer, then they need to be dismantled and have less power.  They were given huge power because all was seller oriented.  Agent wants exactly what seller consumer wants...motivation of agent same as motivation for seller consumer, so large power and self governance given them.  Buyer consumer gaining rights...Realtor Organization not responding in consumer protection fashion...time to take it down to size and no longer defer to their "judgment" and control.

Has there ever before in history been an intervention by government into the affairs of the Realtor Organization?  Why now?  The BIG answer...not the small excuse they found to do so.

Oh, and Jesus says in response to my question at the beginning: "Whatever You Do For the LEAST of My Brethren, You Do Unto Me".  So that leaves me at point #2 where you "found" me :) 

Mar. 16, 2007 - My Project Blogger Apprentice

As seen this week in Inman News, we are getting ready for the kickoff of "Project Blogger".  The Competition is STIFF and the Coaches will be hard to beat!

Here's the meat of the Inman New story on the event: 

ActiveRain will select 10-15 blogging coaches to each train a real estate blogging apprentice of their choice. Over the course of about four months, the blogging coaches will aim to develop the most successful real estate blogger.

Coaches and apprentices will be chronicling their Project Blogger experiences on their own blogs and the Project Blogger group on ActiveRain. A few coaches who have already signed up are Teresa Boardman, who blogs at the St. Paul Real Estate Blog; Ardell DellaLoggia, who blogs at the Searching Seattle Blog; and Jim Cronin, who blogs at the Real Estate Tomato blog. More about the coaches who have already committed to the project is at the "Meet the Coaches" post at ActiveRain.

Teams will be judged each week and scored according to criteria such as degree of innovation in approach, consistency, quality of postings, the apprentice's community involvement, traffic or reach of apprentice's blog, and more.

The competition officially opens on April 9 and ends July 15. Winners will be announced at Bloggers Connect. ActiveRain will donate $5,000 to the winning team's charity of choice.

Interested observers can track each team's progress and updates on the competition at the Project Blogger Forum on ActiveRain.

Inman News' Bloggers Connect is the first conference for real estate bloggers. The two-day event aims to help real estate bloggers gather insights into best practices and the biggest rewards of real estate blogging.

By now you should be wondering who that handsome dude us up there in the photo.  YUP!!  That is my apprentice, Kevin Tomlinson the King of Miami Beach and South Beach Luxury Townhomes.  Stay tuned!  This could get fun!

Dec. 6, 2006 - Zillow.com Announces Major Upgrade

I've already written about the new features on Zillow.com, whereby a homeowner or agent can upload their homes for sale, or tempt the buying public with a "Make Me Move" price for people whose home is NOT for sale.  I can't wait to see what people put into that feature.  I wonder if you can ask for things besides money?  Like YES, I will move, but only if you give me season tickets to the Seahawks, along with my asking price :-)

Some of the BIG questions are:

Will agents post their listings?  If not...WHY not? 

If a seller's agent will not post their home on Zillow.com, will the owner do it himself?

How will the owner and/or agent explain the difference between the Zillow Zestimate and the owner's asking price, as both will show side by side?  I can't get into the new site yet tonight to enter one of my listings, but I had a sneak preview last week.  From what I saw, the Zestimate is going to show along side the owner's asking price.  Will this be confusing?  Will buyers think it is being offered at the Zillow Zestimated price?

The Make Me Move part is just going to be fun.  Can't you see some guy sitting back with his six pack in his double wide saying "Make Me Move" for $1.5 Million LOL.  As I said in the RCG Article earlier this evening, I do think there will be some good uses for the Make Me Move Feature.   We all know a few people who keep their resumes on Monster.com at all times...willing to listen to all offers.  Why not do the same with the Make Me Move Feature?  Put a price up there that would make it worth your while.  Kind of like that commercial where the homebuying family knocks on the door of someone's house and says "We'll buy it" even though it's not REALLY for sale!

Anyway you slice it, we will be getting an eyeful and an earful on this one tomorrow!  I'm still waiting for it to go live to get a listing in there...I tried at 9:21.  I'll go try again.

Oct. 23, 2006 - For Sale or NOT for Sale, that is the ?

Shame on You!!  On Friday the property was shown as ACTIVE and available to purchase.  Before writing an offer, I called the agent who said it was in minutes of being sold.  Just a couple of initials.  On Saturday the property was STILL showing as ACTIVE.  On Sunday...still showing as ACTIVE.  I called and the female agent of the "team" said she had been away for four days and yes it was sold subject to inspection, and she would change the status in the computer.  Monday morning...STILL ACTIVE!!  Called agent and she was on her way into the office to change the status.

Some rules really should not be broken, and this is one of them.  An agent needs to change the status from ACTIVE to ACTIVE STI (subject to inspection) ASAP! after a contract is accepted.  While the rules give you 24 hours to do that, even 24 hours is too long.  Four days is just nasty.  Agents are showing the property.  Buyers are narrowing down their choices to that one house.  Lots of wasted time, effort and emotion only to find that the house was sold days ago.

Do I report the violation?  Not until the house closes.  Why?  Because if it falls out of escrow, as it did once before, my buyer client may be penalized for my actions of reporting the agent being in violation of the mls rule, if and when they get an opportunity to submit an offer.  There really is no excuse for an agent who lists property to not change the status fairly immediately.  If you don't know how to change the status, which takes about two seconds, you should be listing property.

Changing the status from STI to PENDING or from PENDING to SOLD is not as ultra important to be done ASAP as from ACTIVE to STI.  ACTIVE means agents are showing the property, and to cause agents and buyers to be wasting their time is just unconscionable IMNSHO.  Some days I'd like to start my own Hall of Shame.

Sep. 26, 2006 - 51. We Have Met The Enemy and HE is US

In the Second Half of the Sellsius 101 Blogoff, I will try to do what I came here to do.  By the end of the day, those who choose to continue to be "The Deaf, Dumb and Blind" men who want to just go out there and "Play a Mean Pinball", can continue doing so. 

But those who cry out for Transparency, be the Brokers, Agents, Buyers, Sellers or people who just make money off the real estate industry in one from or another, will be taking a glimpse through Alice's Looking Glass. 

Of course, as many are want to do when they find themselves sliding down a big black hole to who knows where, some will want to dig their nails and heels in and climb back up to the Status Quo.  But a few brave souls will tumble down to the bottom, where we continue to figure out where true Innovation may take us.

There will be three Picture Tags for this series of Posts.  Each post will try to stick on one single issue, so that as we try to sort out this grand design, we can concentrate on the three main components involved.  Pogo, the picture above, will be used to tag entries that focus on where people are are most involved in the changes needed.

Feb. 13, 2006 - Dear Mr. "Zillow",

 As you may or may not know, I emailed you guys a couple of weeks before you unveiled your product to suggest that you consult at least one real estate expert, before going public.  I further suggested that since I have sold real estate in five states from coast to coast, that I might be able to help you tweak your product before its unveiling.  I feel very badly that some are poking fun at your great real estate adventure, by coining the phrase Youve been ZILLOWED! 

Here are a  couple of tips for you,.  If you modify your application of data according to these guidelines, you will likely increase the reliability of your online Zestimate by as much as 50%. 

Seattle area:  Yes, you can value property fairly accurately using the tax data in the Seattle area.  But the first step is to determine the appropriate factor.  Many will value out at between 1.2 and 1.4 times the assessed value.  Hot areas, like downtown Kirkland or parts of Queen Anne, etc will value at 1.5 to 1.6 times assessed value.  Dont take the comps out too far, keep your radius small.  Stay as close to the subject property as possible and STOP when you have 5-8 comps after throwing out the High and the Low.  DONT average the sale price of the comps one to another to determine the value of the subject property.  DONT use price per square foot as a guide.  Take each sale price and divide by THAT SAME PROPERTYS assessed value to come up with the factor.  If all of the properties in that neighborhood sold at 1.44 times assessed value, then your ZESTIMATE should be 1.44 times the assessed value of the subject property. You can average the factor, but not the price.  Then use a range.  Chuck the high and the low, the way I learned in grade school from the good Catholic sisters who taught me well. 

Example: Data equals 1.8, 1.4, 1.42, 1.43, 1.44, 1.44, 1.45, 1.47, 1.1 

Throw out 1.8 and 1.1. as the high is a massive remodel and the low is a fixer.  Factor becomes 1.4357142.  Assessed value of subject property is $313,000.  Zestimate is $449,378.54 or between $438,200 and $460,110. 

When inputting tax data, do not overlook the effective year built.  Currently your program is not noticing that very important date, and reverting to the original year built, throwing the numbers way off on 80% remodels.  You can use the 1.8 and 1.1 in the sample above by saying Your home is valued at between $438,200 and $460,110.  If you have just remodeled the interior, the price might be as high as $563,400 (1.8 X $313,000).  If it is a fixer it may be as low as $344,300 (1.1 X $313,000).  

For Seattle area, always use the assessed value of the subject property against the neighborhood factor. 

Briefly, for Los Angeles beach areas:  DO use price per square foot, as by and large that area does not have underground basements and the tax assessment increases to sale price every time a property sells (unlike Seattle and many other areas).

 Florida: Do use price per square foot and keep the comps apples to apples.  Watch the lakes.  Price properties on lakes against other property on the lake and interior against interior.  You are already OK in FL for the most part, so you can leave that alone. 

PA, NJ and most of the Northeast of the country, keep the radius short and use price per square foot.  Then find and apply the neighborhood factor and average the two answers. 

Hope that helps you , Mr. "Zillow". 

Jan. 29, 2006 - Agents "hoarding" mls data and preventing the "free flow" of mls data

Much has been written about this war between the technology industry and the real estate industry, over agents "hoarding" the mls data and preventing the "free flow" of mls data for public consumption. 

The mls download agreement for members only is restrictive, and does not permit the free flow of all mls data, which includes the alarm codes and other private information regarding owners homes. Often it tells agents when the owner will be at work, when he will be on vacation and when he will be sleeping (night shift workers). Agents need this info to know when they can and cannot show the property for appointment purposes. This is info robbers could use to know when the owner will not be home. It is not available for public consumption and is agent only info. 

Only the listing broker knows which sellers allow the photos for agent use ONLY and do not want a sign on the property nor do they want their living room and antiques on "public display".  Just because those photos are "in the mls" does not mean the seller has given permission for his home to be invaded via the internet to anyone who might want to peek inside his home for God knows what reason. 

So when a "bottom feeding", non LIBB member joins the mls for the sole purpose of getting into the mls data system for public display, they need to understand what the mls IS, and what it is not.

Jan. 19, 2006 - ZIP, Zillow and ZAP

OK, lets Get Real for a minute.

On the one hand we have the consumer who wants:

"What they need, no more; no less, for a price that seems reasonable."

Now, lets look at the service providers, both as you know them, and as I know them as an insider. From an insiders perspective there are three tiers of service providers. The traditional full service model, the discounted full service model and the stripped down to you are mostly on your own model. None of these are good or bad in and of themselves. Its more a matter of what is good or bad for you, depending on your skills. But thats for another day. Just wanted you to know that each of these is good for someone. Only question is which is right for you.

Technology has added a fourth option that is not a model in the service provider sense, but one that many consumers at present are opting for, which I will call ZAP.

I have to use analogies because I am somewhat limited by my insider position in discussing commissions and companies. Straight shooter that I am, being a little vague is not my normal modus operandi, so bear with me. Hopefully my descriptions and analogies will be obvious enough for you to follow. If not, you can ask questions in your comments or by email.

Lets discuss and eliminate the ZAP option first, since it is not a service provider, but a place where many consumers get trapped without knowing that they are getting ZAPPED. It is worth mentioning here that ZIP is not a ZAP. Now back to ZAPs. The most obvious ZAPs have a button that says Find a Realtor, or something of that nature. When you hit that button to find a Buyers Agent or Sellers Agent you are decreasing your ability to negotiate the commission, without knowing it. The technology whizzes who create these websites take a portion of the commission, without disclosing that to you the consumer. They do not provide a service to you, the consumer. They provide a service , for a fee, to the agent who is a participant at a cost. There are many of these and we call them lead generating sites, bottom feeders or troll sites.

Lets take a specific example of how these work, and there are many of these available to you. Lets say you are a buyer, rather than a seller, of real estate. You go to look at property on one of these sites, which is how they reel you in. You then hit the I need a Buyers Agent button and are connected with an agent. Lets say based on the price of the house you will eventually purchase, that the commission will be $9,000 as pre-set by the seller of that house when he listed it for sale in the mls. When you connect with the agent by hitting that button, you have generally spent in that process of merely hitting a button on the website, the money you could have negotiated toward your closing costs or repairs or against the purchase price.

The agent who gets you has paid for you. He pays for you out of the $9,000 on the table in your transaction. Sometimes he pays it up front in a monthly cost of say $1,000 a month. So if it took three months for that agent to get you (the lead), he has paid $3,000 for you. When you try to negotiate something for you from the $9,000, the agent has already given $3,000 to the 3rd party ZAP company, and so you get ZAPPED, as your ability to negotiate has been diminished or entirely eliminated without your knowledge.

Some other sites are not pay as you go for the agent, but pay as you close. In that case the agent will owe the ZAP a percentage of the commission, if and when you close escrow. Again, the monies you may have been able to negotiate with your agent have been sucked up in advance without your knowledge.

Some of these sites operate like the one sided mirror glass of an interrogation room that you see on shows like Law and Order and the like. I find these lead generating Big Brother website options to be exceptionally creepy, but hey, thats technology at its best, I guess. When you sign up to the site to view and save property, you are assigned to an agent in the queue without regard to whether or not it is a good match. Those who have paid in to look at you look at property, get the leads kind of like the way a lottery ball pops up to the top and gets pulled. I'm trying to give you the facts without editorializing, but its difficult for me as I find these sites intrusive and deceptive.

OK, back to facts. The agent who wins you in the lottery of the moment, gets to see everything you are doing from the inside without your knowing he is watching you. He can see what properties you are viewing. He can see which ones you are saving vs. ones you are trashing, he can get inside your head a bit. He gets all of the info you have put in to register for the site. You then get an email from him, and maybe a phone call, saying Would you like to go see X property? You are dumbfounded and amazed and think he is absolutely clairvoyant! Or maybe you DO want to see that property and don't think about how he guessed you might want to go see that property and you just go see that property without a second thought.

LOL OK, I cant stop editorializing, can I? Don't you find this just absolutely creepy? Maybe its me. Ill stop here for today and will continue after some of you comment on this so far. Maybe its just me. What do you think? Id like to hear from you before I go any further. After 5 comments I will go to Part 2 of ? 

As to the Title of this entry, lets review. We are mostly talking about ZAPs that ZAP you, the buyer consumer. ZIP is NOT a ZAP. While you all sit at the edge of your seats awaiting Zillow and its wonders, we all (the insiders for lack of a better term) are sitting back expecting another exploitative ZAP type. Of course No one knows, but the Shadow, but at least know what to look for when it comes. My expectation is that it will not give you what you want. That being What you need, no more; no less, at a reasonable cost as noted in the second sentence of this entry above. (Someone let me know if that IS what the consumer wants, please. Thanks.) 

But it will WOW! you with its technology, reel you in, and then sell you off to the highest bidder. No one knows yet, but if you hear anything new about it let me know and I will decipher the code. 

Five comments from YOU, the reader, and then we will move to the actual means a buyer has to negotiate their commission, unless they have already shot themselves in the foot by being totally or partially ZAPPED without their knowledge, from the ability to negotiate. 

Jan. 14, 2006 - ZILLOW.COM

HERE WE GO AGAIN!!

Another super-duper, we're gonna do it better, online real estate company!  I am absolutely positive that someone is going to get this totally right, eventually.

Best we could come up with is giving everyone the freedom of choice.  One shop for all.  Everything from top of the line representation to whatever you can negotiate.  No rules!  All is Fair Game!  Maybe if you can combine that thinking with a Zillow.com type of software talent, you'd be onto something.  The sky's the limit!  Who knows?

With the backing Zillow has, they ought to be able to come up with something good.  Or will it be all about technology?  A glorified Redfin?  Lots of Wham! Bam! Thank you. M'AM.!  Great technology and graphics, but no one who knows a hill of beans about providing real fiduciary services to the consumer?  No one who understands why 5 days is more than 6 days?  No one who understands when to NOT fill in a non-required field to better represent the seller?  Will it be representation worth less than nothing at only a fraction of the cost?  What a bargain!

Only time will tell, and we are certainly all waiting and watching.  I personally hope it's a doozie!  A real show stopper!  A real answer to bridge the gap between the old fogeys and the techies!  I know.  I'm a dreamer.

Well, so far it's all fanfare and hoopla with no substance.

Jan. 14, 2006 - Rain City Guide Response

Galen asks: Is it bad if everyone else does it too? What if you are one of the best? 

The Department of Justice suit against NAR is a very complex issue, which, I will follow and explain at length in my own blog. But let me raise a couple of key points for general edification in laymen terms. 

There is absolutely nothing wrong with the consumer getting what he wants. There is absolutely nothing wrong with the consumer having many options with regard to the price he or she might pay for Buyer Agent services or Seller Agent services. 

While we in the State of Washington, may not have to worry about the issue at hand, because our NWMLS is not owned by the Board of Realtors as it is in much of the Country, we have other forces to be reckoned with. There is a misperception that real estate licensees sell houses. We do not sell houses for a living. We represent people for a living. That is required of us by law even moreso in the State of Washington than in many other states. 

Under our State Law, a real estate licensee is obligated to represent consumers as the default, without the consumer needing to invoke the question Will you represent me?. When a seller wants to be a glorified FSBO and garner ONLY mls exposure, a sign in front of his house and a keybox, the licensee is not necessarily relieved of his/her legal obligation to represent that consumer in a fiduciary capacity.  

It is certainly OK for a consumer to trade down to a minimal service for a minimal price. But the State will have to catch up with this option by changing the Disclosure Laws and required Disclosure of Agency Laws pamphlet given to consumers, to incorporate this option. States have the role, duty and obligation to protect consumers from being their own worst enemy, if you will. At present we are one of the only states in the Country that offers full, fiduciary service as the default.  

As long as the Courts continue to hold the licensee liable for being the advocate of and full fiduciary agent of the consumer, the options will continue to favor the consumers protection rather than his money. Fiduciary is a big word.  I have represented consumers in a fiduciary capacity for 35 years or so in both the fields of real estate and trust and investment services, and so "get" the meaning of this word better than most real estate licensees.  

Fiduciary means I always do what is best for you, without regard whatsoever to whats in it for me. 

One simple example, and then I will go to the office to represent a buyer client. We recently fired a real estate licensee. She was bemoaning the fact that we told her to show her client a property that was $200,000 less than that buyers max affordability. It was a great bargain and perfect for that buyer client. The agent complained that she would make less money if the buyer bought a lower priced property. We tried for about three weeks to impress on the agent that her duty was to help the buyer get the best property at the best price, WITHOUT REGARD TO WHAT SHE, THE AGENT, WOULD MAKE ON IT. We could not get our point across. We could not persuade her to come from the right place in her mind and heart. We fired her. 

Someone can say, I dont need full fiduciary services, I just want the mls and a lockbox and minimal service. They can pay any price they want, as long as they understand that they are trading down.

So the answer to your question, Galen, "Is it bad for everyone else to do it too?"  I ask you, what is it?