Many people enter the real-estate industry because the requirements are light and the possible rewards seem great. "I want the license for my own deals" or "I'll just do some for friends and family, here and there" are the most common refrains. And from a distance, real estate seems like a tremendous risk-reward proposition: pay $300 - $400 to attend a certified real estate school, pass the licensing exam and activate your license for $100 and change and you're off and running.

Right?

Well, no.

I just completed paying my yearly dues to the Phoenix Association of Realtors. It's almost the stuff of MasterCard commercials:

    National Association of Realtors Dues         $  94
    Arizona Association of Realtors Dues           $150
    Phoenix Association of Realtors Dues          $  75
    Opportunity to be bashed on real estate
       bubble blogs from coast to coast                 PRICELESS

Membership in NAR locally isn't exactly required but if you want access to the local MLS you have to belong. You also have to pay a separate MLS dues fee later in the year.

Everywhere you turn in this profession, there is someone waiting with their hand out politely requesting another check. And so you wonder ... with the turn in the market last year and with the seemingly easy money of 2005 gone, how many part-time sometime real estate agents are going to reach into their wallets for another year's worth of dues? My hunch is we'll see the numbers decline this year ... not an unwelcome sight, not so much for the reduced competition but simply because of the level of competence (or lack thereof) being purged from the market.


(c) Jonathan Dalton, 2006 / Jonathan Dalton's Arizona Homes

Technorati Tags: NAR, tags
Add to: | Technorati | Digg | del.icio.us | Yahoo | BlinkList | Spurl | reddit | Furl |

Realty Thoughts and the Silicon Valley/San Jose Business Journal both are reporting that the Houston Association of Realtors has reached an agreement to post all of its MLS listings on Google Base.

Some may argue this is another step toward the imminent demise of the MLS; that conclusion makes little to no sense since the Houston area MLS is the vehicle through which these listings will be entered into Google. I would be willing to entertain arguments that this is another nail in the coffin of Realtor.com; while R.Com remains the dominant player for real estate listings (despite Zillow's traffic catching up, the big Z lacks the listings at this stage), signs of erosion are growing.

This agreement also likely will lead to the usual Chicken Little chirping from those who believe this will push Realtors closer to extinction. Aside from the immediate idiocy of the argument - who do you think is entering these listings into the MLS - and the general need to rationalize one's own decision to go it alone with real estate versus using an expert, this stance also assumes an unbreakable (but non-existent) link between Realtors and Realtor.com.

Back to this in a moment.

Says Bob Hale, president and CEO of HAR, "As far as I know, we're the first association in the country to put all of our listings on Google." Congratulations, Bob. I think. We only can assume (and/or hope) that Bob and his group asked the member brokerages before making the decision. This isn't to say the idea is poor but it does lead to other questions, such as those raised later in the San Jose Business Journal article ...

"Google won't sign a document to protect the data, and they won't sign a document to use it for limited reasons," says [James Harrison, president and CEO of REInfoLink, the Silicon Valley MLS service.] His agreements with the brokers who provide listings to REInfoLink limit what his company can do with the listings information, he says, and he legally cannot give Google more rights than that. ...

No matter how benign the relationship appears today, questions remain about Google's longer term strategy.

Will Google try to sell advertising around the content? Or ultimately will Google replicate a business model others have tried of seeking payment from local real estate agents for leads generated from the Web site traffic?

To its credit, Realtor.com does not sell its leads back out to the agents who are providing the content with their listings. But they do charge a fairly substantial sum, based on the number of listings an agent has, for "enhanced" listings that are more visible on the website. Pay an extra fee and you can add additional photos, get a pretty color border around your listing, etc.

Personally, I've yet to pay for a Realtor.com upgrade because I've not seen any value other than being able to tell the sellers "look at the pretty colors." There are reports that show the number of viewings each property has had - not bad for CYA - but most sellers are less interested in the number of showings as the number of offers they have received. To me, the value's just not there.

So to try and link my business to the fate of Realtor.com would be a mistake. And the same goes for the MLS, which I believe will remain if only because it still serves its original purpose - allowing brokerages to communicate listings to each other. Those who understand the basic premise of the MLS also will understand that the future of a local MLS is unrelated to all the other changes technology is bringing to the real estate industry.

Dissemination of listings to the public was an inevitable outgrowth of the Internet-drive communication revolution. But despite the increased visibility of these listings, the public is not a party to the MLS - not in its truest sense, not looking at it for its core purpose. While many agents still inexplicably tell clients that the MLS sells homes, adding to the misguided mystique, others of us are doing everything we can to market our homes outside the MLS. We are embracing the technology and leveraging it to our clients' advantage.

Back to the Houston MLS ... is the agreement with Google Base a good thing for sellers? Probably. For brokerages? Possibly. For agents? Time will tell. But, much as I feel with Zillow, I believe HAR should keep an eye out for the other shoe in case it drops.

(c) Jonathan Dalton, 2006 / Jonathan Dalton's Arizona Homes

With getting some listing paperwork signed late yesterday afternoon, spending some time with the family and then attending an Executive Committee meeting for my local synagogue, I was out of the electronic loop from about 4 p.m. yesterday until mid-day today. Little did I know the new real estate world that would be waiting for me today.

That, of course, is an exaggeration. But from the proliferation of articles today on one topic - an upgrade to Zillow that allows property owners to "list" their own properties and set a "make me sell" price (a dream price at which they'd start packing, even if they had no intention of moving) - it would seem the real estate industry as we know it has come to a halt.

Well, yes and no. And it seems opinions on the ultimate impact of Zillow's changes depend greatly on the author's already-established opinion of the direction of the real estate industry.

Merv at the Northern Virginia Real Estate Guide opined ...

The significance of this might well be to make every MLS obsolete, realtor.com irrelevant, Google Base old fashioned, Craig's list history and significantly transform the role of a real estate agent as a central figure in the transaction to one of a real estate transaction advisor as buyers search for homes and sellers are empowered to market their own homes on a massive scale.

I believe we're several steps short of every MLS being obsolete or even making Realtor.Com irrelevant. For all of the discussion of local Multiple Listing Systems pulling their listings from Realtor.Com, the fact remains that the vast majority of brokerage-listed properties not only can be seen on the site but are automatically populated. Zillow, at this juncture, is relying solely on property owners and enterprising agents to enter homes for sale. Kris Berg at the San Diego Home Guide discusses this further.

As for the impending obsolescence of the MLS, I believe this is a notion fed by a misconception of the MLS' purpose. As I have stated many times, the Multiple Listing Service is nothing more or less than a database that allows real estate brokerages to communicate their listings to each other while also offering cooperation to those brokerages who bring buyers to the listings. Since Zillow does not have all the homes for sale, and there is no offer of cooperation, it in no way replaces what exists in the MLS.

Now call my a cynic (I'll wait while you do so) ... but if Zillow attracts a great number of people to the website to list their homes, and in time it is proven that this service provides value, isn't it logical to expect the big Z to charge for the service? And once they cross that threshold, are the Zillow listings anything more than a better marketed FSBO site?

Also, Zillow has decided to allow agents to add their property listings to the site. I've tried it here and others, including Ardell in Seattle and the aforementioned Kris Berg, were doing the same. And again, if it is proven that there is value to a Zillow online listing, wouldn't it be natural to assume that Zillow ultimately will charge for this service? And when they do charge for listings to be added, does the site then become more or less relevant than a Realtor.Com that also charges for upgraded listings?

I'm going to wrap this as much of today's discussion across real estate blogs has been duplicative. But before I call it an afternoon, I'll add one final twist.

So far I've added one property to Zillow. Why? Because in the other cases, the Zestimate provided is lower than the list price of the home. While it seems like a simple difference in calculations, consider the possible ramifications over time:

1) Does a lower Zestimate, accurate or not, provide a prospective buyer with a starting offer or, worse yet, a perceived notion of value that will not or cannot be overcome with additional information?
2) Since Zillow allows property owners to adjust the estimated value of their home, are we going to see homeowners adjusting their prices to the values they'd rather see to justify higher possible list prices? (In theory this can happen now, but I believe the side-by-side sales price and estimated value will create an inexorable link in the mind of a buyer.)
3)  Can a property owner opt out of the system when the estimate can impact their ability to sell for fair value? Sellsius wrote about this one.

And the final question ... while the technological side of things seems wonderful, is there anyone else wondering how strong a structure being built upon a house of cards possibly can be? Keep in mind I have no issue with Zillow adding listings - while the bubble heads are off praying for the destruction of the real estate agency, those of us in the industry with any kind of a clue already are adapting in under a day.

But given that Zillow's estimates only are as good as the last few sales, that in areas where there are no sales the data can be shaky, that there are any number of unzillowables out there ... with an increasing amount of information presented as fact versus conjecture, will this great real estate Tower of Babel come tumbling down if the underlying stones mentioned in the previous sentence aren't anchored more securely?

That's it for me ... I'll be going through the rest of the posts in a bit. If you're interested in the varied reactions, here's a list compiled by Drew at the Zillow blog:

Greg at the Bloodhound Blog on the 900-pound AVM
Ardell's first blush at Rain City Guide
Future of Real Estate Marketing, Zillow Offers Free Listings
Transparent RE's Zillow Primer
Kevin Boer at Three Oceans on the world changing
Galen's always unique perspective at Rain City Guide
Jim Duncan at Real Central Virginia
Maureen Francis' first-ever Zillow post. (Really?)
Jonathan Miller at the Matrix on the make me move price

(c) Jonathan Dalton, 2006 / Jonathan Daltons Arizona Homes

Pittsburgh Homes Daily is reporting that the Pittsburgh/Western Pennsylvania MLS has decided to limit IDX feeds only to the websites of principal brokers, meaning the only place to see a the listings is at the company-level site. IDX is one of a couple of methods many Multiple Listing Services use to distribute listings data to member brokers and agents; I rely on a souped-up version of the free local IDX feed on my website and have been successful in generating business off the feed.

The Pittsburgh/West Penn MLS' decision is short-sighted in the extreme and seems to benefit no one except the brokers. It doesn't help buyers to have reduced access to the listings and it doesn't help the sellers to limit exposure of their properties only to the brokers' sites. And in the long run it doesn't help the listing brokers themselves as they are eliminating a potential source of buyers for their listings.  At least in Phoenix, it's rare to see a company website rank higher on the search engines than multiple individual agent sites as we as individuals spend far more time working on the optimization than the brokers themselves.

Where most of us are advertising our listings electronically wherever possible, the brokers in the Steel City seem far more interested in protecting their double-dip potential.

Of course, another party severely hurt by the new policy is the agents. As I mentioned, I rely on my IDX listings feed to help drive business on my site. In Pittsburgh, however, agents will no longer be able to frame even their own companies' listings on their websites. For the time being they still can post their own listings, though it's not overly far-fetched to see a scenario where a broker decides against that practice. Listings, after all, are technically a contract between broker and seller, and should the broker decide they are to be the only Internet source for this information ...

Sigh ...

On a thoroughly unrelated note yet still falling into the category of short-sightedness, there was a debate on Active Rain about the value of advertising listings on your blog. The theory is the realm of the blog is a free leaning zone, where the public comes to be educated and should not be bothered by banal home listings.

Um, sorry. But I respectfully disagree.

As much fun as blogging has been, my primary job remains to buy and sell houses on behalf of my clients. And when I'm trying to sell a listing, I want it advertised everywhere possible. Even on my blogs. If someone doesn't want to see the listings, that's fine. Don't click under the Houses for Sale link and you won't be troubled by them.

This isn't to say I believe the blog should be a sales catalog first and foremost. But to not use the potential of a blog to your clients' ultimate benefit seems to defeat the ultimate purpose.

RELATED ARTICLE: Pittsburgh Real Estate Just Moved Into the Dark Ages or Forward Into Dark Times

(c) Jonathan Dalton, 2006 / Jonathan Dalton's Arizona Homes

Yesterday on Active Rain, Maureen said every prospective home seller should run the name of any agent they are considering through Google before signing a listing agreement. If you can't find them, she theorized, how will any buyers? And if a buyer can't find your agent, what are the chances of them finding your house?

Real estate has moved beyond the point of entering homes into the local MLS and waiting for the showings to happen. While it may have been this easy a year ago, with the inflated inventory levels, the odds of one of several similar homes being picked out of the MLS are little better than your ping-pong ball coming out of the Powerball machine.

Repeat after me: the MLS does not sell homes. If you're hoping your agent will leverage the MLS and do nothing else and still sell your home, you may be in for a very, very long wait.

There are some factors that help, of course. Pictures are a necessity and the Arizona Regional Multiple Listing Service allows up to six photos to be entered on each listing. Yet more than 11,000 of the 32,000-plus listings in ARMLS do not have the maximum number of pictures to show to prospective buyers. More than one-third of these listings are not providing the buyers the visuals they demand.

Virtual tours also help - you can argue the merits of 360-degree views of different rooms or a panoramic shot of different areas - but less than a quarter of all listings in the Phoenix area have any type of virtual tour.

Your home needs to be marketed where the buyers are - and 80-plus percent of the buyers now are on the Internet looking for their next home.

Most agents in the Phoenix area have a website for their real estate business. And the vast majority of these websites are seldom visited and generate no business to speak of. They're pretty billboards in the desert - and once you sign the listing agreement, your property picture (and maybe just one picture) will be stuck on that pretty billboard no one ever will see.

Just as many continue to advertise in the local newspapers and real estate magazines, hoping a glossy photograph can make up with a couple of lines of abbreviated text and some likely outdated information. What do you believe is more effective - three lines of abbreviations or a full-color property page dedicated solely to your home?

Many agents curse their e-mail daily as their Inbox fills with e-mail flyers. The vast majority of these end up in the trash bin, just like many of the Just Listed postcards I send with every listing. But if there's the slightest chance of making an agent aware of a property they otherwise might overlook if it was buried in the MLS, then I've done my job. The odds are long but the payoff is huge. And so I e-mail away where others sit back and wait for the buyers to come.

Before signing a listing agreement, think about how you went about purchasing your new home. I'm willing to bet you used the Internet. Maybe it was Realtor.Com, maybe it was a Google or a Yahoo! search. Or maybe you had the wisdom to search Google for "sexy beagles in the Northwest Valley whose owners sell real estate."*

* I don't think this actually brings you to my site, but Tobey demanded the plug.

The odds are you conducted your search much as the prospective buyers for your home are conducting theirs. Is your home positioned in a place where the buyers will find it? If the answer is no, you know who to e-mail for help.

(c) Jonathan Dalton, 2006 / Jonathan Dalton's Arizona Homes