(photo credit: mop squad)

Kevin Costner was hot 20 years ago in Field of Dreams. So was that comment “If you build it, they will come.” I received a fantastic comment from a home buyer today for my previous post How Listing Agents Unintentionally Sabotage Their Own Staged Listings:

1. Danica Says:
   May 12th, 2008 at 10:51 am That is so true. As a potential buyer, I have been frustrated many times by Craigslist ads that have no picture. There are a ton of houses out there, and I’m trying to weed out the ones I don’t want to look at - it’s really impossible without a picture.I’ve seen so many places, staged or unstaged, that sounded great on paper and then turned out to be hideous-to-unlivable in person.More importantly, even though online listings at a place like Craigslist are free and offer almost unlimited space, a lot of sellers just put up one or two sentences and no pictures - and to me that says “I don’t have it together enough to actually market this house.”

   And my experience has been that often, that means they don’t know how to deal with the paperwork, or with my questions, or even with basic social skills.I guess in a way it’s helpful to see a boring, picture-less, one-line house ad - because it tells me I don’t want to deal with that seller. But it’s still hilariously frustrating to see an ad online that says something like, “2 BR 1.5 BA NICE!!! MUST SEE CALL JAMES SMITH REALTOR 555-1414!”

This is a brilliant comment, it just goes to show that with that in this fast changing real estate market, our buyers’ behaviors have changed. The old attitude of “If you list it, they will come” no longer works. That worked in the movie Field of Dreams for Kevin Costner but guess what? Kevin Costner is OLD news now. That phrase was coined 20 years ago, so is that attitude. It’s freaking 20 years old. Shouldn’t we move on with the times?

A savvy marketer knows that today’s consumers are so de-sensitized by advertisements that they need more interactive and user-friendly contents [Note: “content,” NOT “ads.”] to make an educated decision before buying. You can see that through the fast rising numbers of business blogs and web 2.0 services. People want interaction, not sales agenda ramming down their throats.

Also, today’s agents no longer holds monopoly to MLS information. Internet has made today’s buyers more savvy, shrewed, efficient and much more likely to start their buying process without agents. Additionally, if the consumers cannot be satisfied by you, it’s very easy for them to go elsewhere. To be able to work in a competitive market, as a listing agent or FSBO (For Sale By Owners), you will need to get on with the time to provide a comprehensive and user-friendly marketing package.

To do so, here are a few tips as pointed out by Danika, our lovely buyer:

*Online presence is KEY. Staging the property will instantly make the home show-ready online. Once you have staged, having big & high quality photos is a must.

*Don’t just do 1 photo, if you are allowed to post 10, why not do 10?

*Place ONLY good quality photos that will entice buyers’ appetite. Photos like featuring the local eateries or parking lots are not really adding anything to your listing.

*Be creative, not boring and cookie cutter in your listing descriptions. “2Br for sale” is kind of a duh since anyone can read it from the sheet. Why not say something more descriptive that showcase the unique selling points of your listing?

*MOST IMPORTANT: Provide reasonable expectations for buyers. If your listing sounds like the “IT” property to buy and buyers walked into an ill-maintained home, they will turn around and leave immediately because you have wasted their time. If the house is staged, keep it staged while you sell. If you property was already on market then staged, showcase the staged photos online and on flyers and take out the old unstaged photos.

Happy selling!

Cheers,

Cindy

Share This

Symantec, the Internet security firm, today released what they described as a “code red” security patch for all real estate bloggers currently using the now-infamous “Google Juice Sucking” Trulia widget.

Tipped off by an anonymous Active Rain’er who had come across this discussion thread, which in turn had been prompted by good investigative sniffing [sniff one, sniff two, sniff three] by the pack at Bloodhound, Symantec’s elite Taskforce Realty Internet Permission Experts (TRIPE) worked through the night to come up with a patch. The head of TRIPE, Dr. Francois Viande-Fichu, released the following press statement:

With thanks to the ever-vigilant Active Rain-droppers for tipping us off, we were stunned to find some pretty damning evidence of foul play in Trulia’s widget, which unsuspecting Realtors have been deploying on their web sites in droves. Trojan Horses are one thing, but what they’ve come up with is something far more nefarious: a Peloponnesian Unicorn.

The Trulia widget does the following:

• Sucks out the hosting web site’s Google Juice, especially the Raspberry flavor.
• Decreases the hosting web site’s Google Page Rank to negative 5.
• Installs a little Trulia MarkerMan on the desktop whose eyes follow you around as you surf, and they roll sarcastically whenever you visit Zillow’s site.
• Automatically and instantaneously rises Trulia to the top of the Google rankings for all searches related to the host site.
• Makes the web site owner/blogger start chanting Gregorian hymns in the original Latin.
• Refers all incoming traffic to the hosting site’s owner’s fiercest competitor, in exchange for a 25% referral fee.

When challenged to provide evidence of the above, Dr. Viande-Fichu displayed the following code embedded into each Trulia Widget.

<;?Php Embed Java Script<Trulia Evil Widget.class.nefarious>;
While {5>1 DO:
Trulia.PageRank = Site.PageRank*2 / Slurp.Giant.SuckingSound;
Site.PageRank=-5;
Install.Icon = http:/trulia.com/images/trulia_markermen_icon.gif; option bug eyes=”true”;
If Site.Visit=”Zillow” Do {Icon.Roll.Eyes And Sigh.Loudly};
Google.LocalSearchRankings.Site.City = “Truliawful”;
Trulia.LocalSearchRankings.Site.City = “TopOfFirstPage”;
Launch Latin.hymns.InstanceGregorian;
End Do}
?end Php>

Agents who’ve installed this widget are advised to uninstall it immediately, then put the following badge on their web site to protect them in the future:

To install this widget, do the following:

1. Download this file to your computer.
2. Open the file in Notepad or some other text editor.
3. Copy and paste the contents of the file into a sidebar Text widget.
4. Rinse and repeat.

Full disclosure:

1. I did a consulting project for Trulia last year.
2. Trulia out-ranks my site for many Google searches.
3. My site outranks Trulia for many other searches, including, most significantly, peace corps volunteer botswana real estate palo alto.
4. Trulia’s no-follow policy applies, as far as I know, consistently across all broker’s listings, including mine.
5. No animals, Realtors, or SERPS were harmed in the production of this post.
6. Void where prohibited.
7. Do not ingest.
8. This blog is not a toy. Keep out of reach of children.

Share This

Maybe it’s the frustrated business school professor in me, or the memories of sitting in Professor Barry Nalebuff’s classes during business school, but what has fascinated me the most about the ongoing debate about Trulia’s no-follow outbound listings links (started here by Galen Ward, then continued here, here, here, and here) is not the arcana of the no-follow tag, not the dissection of SEO intricacies, and not really even the question of what is or is not appropriate to do with listings online.

No, what really fascinates me about this debate is how it accentuates co-opetition in the real estate industry.  Co-opetition is simply the notion that companies compete and co-operate simultaneously.  Arch-rivals Northrup Grumman and Boeing go mano-a-mano to get a lucrative government contract … and the winner often subcontracts part of the project to its rival.  Microsoft and Oracle have competing database platforms but often sell eachother’s products.

In our industry, co-opetition reaches nearly incestuous levels.  For instance:

• Brokers John and Betty compete for the listing at 123 Main Street.  Betty wins and puts the property on the MLS.  The very next week John brings potential buyer clients to the property.  Sure, he would rather have won the listing, but that’s in the past.  Now he’s working with Betty to consummate the transaction.  No hard feelings.
• Realtor Bob hangs his license with ABC Realty.  He puts an ABC Realty sign on the front lawn of all his listings, and the ABC Realty logo is prominent in all his media ads.  He’s co-operating with his real estate brokerage to promote their brand, and he in turn benefits from that brand awareness.  Co-operation.  A phone call from a prospective buyer of one of Bob’s listings, however, may well go through to the agent on “floor duty.”  That agent turns this phone call into a client, who goes on to buy a different listing, not Bob’s.  That’s competition — Bob would have loved to get that phone call and turn it into another client, but his competitor — the other agent, and to some extent his own broker — snagged that client.  Co-operation plus competition = co-opetition.
• A thousand local brokers — each fierce competitors — co-operate to run a local MLS.  They put their competing listings up on the MLS, and they compete to bring buyers to each of the listings.  At the close of each transaction, we again have co-opetition — competing parties co-operating for the sake of the deal.
• Broker Tom snags a listing and puts it on the MLS.  Via the wonders of IDX, that listing spreads its tentacles onto a thousand other sites, including that of arch-rival Broker Sarah.  As long as Broker Sarah indicates that Tom is the broker of record, it’s all good.  Her site is much better than Tom’s, so she gets more traffic and hence more clients online.  The fodder that draws in those visitors?  Listings … not only her own, but also Tom’s.
• Broker Rachel gets the listing at 789 Elm Street and puts it on the MLS.  She also puts it on Trulia, which, like the MLS itself, exposes the listing to a much broader audience than she could reach on her own.  She benefits from the increased exposure, and Trulia gets more inventory to display.  It’s a win-win — co-operation at its finest.  The next day, a prospective homebuyer passes 789 Elm Street and Googles the address to find out more.  Who’s on the top page?  Trulia and Broker Rachel’s listing site.  Now they’re competing — for web traffic.

There really is nothing new under the sun.   This business has always been a co-opetitive one, and we’ve always simultaneously co-operated with and competed against not only every other broker, but many of the third-party advertisers, aggregators, and media companies.

Share This

Continuing my earlier rant about how real estate statistics don’t always tell an accurate story, let’s look at what Menlo Park’s numbers seem to indicate for our ongoing robust spring market.

First, a recap:  courtesy of our good friends the quant jocks over at Altos Research, we saw that the median price numbers for Menlo Park had dropped by some 30% — from $1.25M to $850K — over the 9 month period from April of 2007 to January 2008.

That drop in median price, however, by no means reflected the reality on the ground in Menlo Park — in other words, it is not true that a home in Menlo Park that was worth $1M in April 2007 was suddenly only worth $700K in January 2008.  The reason for that disconnect was simply the change in the mix of properties being offered:  in the last half of 2007, the inventory of lower priced homes east of 101 swelled, dramatically pulling down the overall median.

As if to emphasize that disconnect, we see what appears to be a dramatic price recovery from January of 2008 to now in May of 2008; in fact, it looks like the market has regained all 30% of what it ostensibly lost late last year!

Again, the reality on the ground is quite different; that is, a Menlo Park home that was worth $1M in January of 2008 is most emphatically not suddenly worth $1.3M today.

Moral of the story?  Simple:  real estate statistics are good at telling some stories, but not very good at telling others.  In particular, the median often simply reflects the mix of properties currently on the market and not necessarily any underlying ups or downs in the market.

Share This

As our resident expert, Kevin Boer noted in his April 1 posting, the housing market officially hit  bottom a couple of weeks ago. For those of you who  were  skeptical of his information given the  April 1 posting date, and Kevin’s well known reputation for satire and irony, the California Association of Realtors published some new market data yesterday (April 24) showing how real estate really is local, and that the local real estate market in Silicon Valley is humming along nicely, thank you:

In case you’ve been wondering why high-end real estate markets continue to perform relatively well:  One out of every 10,000 American families has an annual income greater than $10.7 million, according to two university professors who study the super-rich.  By their tally, there are some 15,000 Americans who fit into that category.  These individuals also are getting an increasing share of the economic bounty:  In 2006, the super-rich possessed 3.89 percent of total income, up from .87 percent in 1980 and the highest level since 1916.

Strong employment and wage growth are two factors that have helped the San Francisco Bay Area stave off the kind of home sales and price declines experienced in the inland regions of California.  For example, Santa Clara County residents earn nearly double the nation’s average weekly wage and surpassed Manhattan as the county whose residents take home the largest paycheck, according to the U.S. Bureau of Labor Statistics.  Santa Clarans take home an average of $1,585 per week, slightly more than Manhattanites, who earn an average of $1,544 a week.  San Mateo County ranks fifth in the nation at $1,322, while San Francisco is eighth at $1,286.  Nationally, the average is $818.  San Francisco ranked tenth in new-job generation, adding 18,000 jobs for the twelve months ending Sept. 30, 2007.

Despite the above, some worry that California’s technology sector may be in for another “dot bomb.”  But experts say technology and Internet companies are better prepared to weather the storm this time around.  Their reasoning?  Many Web 2.0 companies learned a lesson from their free-spending predecessors and have discovered ways to operate with fewer employees and at lower costs.  That appeals to venture capitalists, who have tightened their criteria but continue to seek companies with strong revenue models.

Lately, I have been describing the market as “upside down”, where I am seeing unusually strong sales activity in the over $3 million market, while under $1 million is about the same as last year, or a little off depending on the neighborhood. What is interesting, is the $1 million to $3 million market, what I call “tweeners”, because these homes are in-between the entry-level and high-end.

Gross simplification warning: Buyers of “tweener” homes have significant amounts of cash or equity to put down, but still need a mortgage, and often a significant one. As banks and other mortgage providers have tightened their lending guidelines from recent years, it has become harder to get a $1.5 - $2 million mortgage, and those have become more expensive. As a result, more people aren’t upgrading, or they are getting priced down from say, $2.5 million to $2 million. Thus reducing demand relative to supply and creating a soft spot in the market.

In my experience, in the $3 million and over market, Buyers have more cash, Euros, Rubles, Yuan, Dinars, stock, gold, trust money, etc. to use to purchase their new “executive home”, so they are less concerned or affected by interest rates and loan qualification hurdles.

Let’s hope that VC money mentioned in the article above keeps flowing so we can keep paying for our million dollar tract homes and $5 a gallon (you know it’s coming!) gas.

I know you will have an opinion or comment, share it here.

Thanks for reading.

Share This

Some of you will remember my post on the lawsuit in Southern California where the buyers of a home were suing their agent because they felt they overpaid, and the agent had acted to hide that information from them (Refresher available here).

This case had lawyers salivating, and brokers trembling, as it potentially could provide precedent and open the door to lawsuits by home buyers who purchased homes during the recent run-up in housing prices, and are now seeing their local markets stagnate or fall.

According to the following article released by the California Association of Realtors, the jury on the case found in favor of the real estate agent.

There was no mention of the issues that I flagged in my earlier post, namely that the agent didn’t share the appraisal or list of comparable properties with the client, or that he encouraged them to get their home loan through him and use his appraiser.

I’m sure that there are many real estate agents out there who also are great mortgage brokers. I’m not one of them. Frankly, I’m not smart enough to keep up with all the issues in real estate law and the local market, plus all the ongoing changes in the lending market.

Thanks for reading . . .

REALTOR® WINS HIGH PROFILE JURY TRIAL
After only two hours of deliberation yesterday, the jury unanimously vindicated a buyer’s agent accused by his clients of failing to disclose that two other homes in the neighborhood sold for less than what they paid. As a trial court case, this decision in Ummel v. Little is binding on the parties to the case, but has no binding authority for other cases. Moreover, the buyers may file an appeal.

This case involved a couple who bought a home in a coastal Carlsbad community in 2005 for $1.2 million. They regretted their purchase when they discovered that two other homes sold for about $150,000 less than theirs. They sued their real estate agent for negligent misrepresentation and breach of fiduciary duty. Their lawsuit grabbed national attention, given the recent downturn in the real estate market.

At the trial, the agent’s attorney argued that there were valid reasons these two other properties sold for less. One home, for example, had a lap pool which was unappealing to many buyers, and the sellers wanted to rent back the home for two years.

Share This

With surprisingly little fanfare, Redfin, that pesky little Seattle brokerage the real estate industry loves to hate, announced yesterday their “Redfin Select” program, which looks suspiciously more and more like … a traditional brokerage offering.

Redfin’s initial business model, which made great sense in the VC’s conference rooms, was to outsource a big chunk of the buying process to its clients in exchange for a big chunk of the buy-side commissions.  For better or for worse, however, that model has continued to run dab-smack into the middle of the reality of real estate:  the listing agent, though representing the seller, is not usually responsible for showing the property to every interested buyer.  That service is usually provided by the agent representing the buyer.  The problem?  In order to make offers on a property, Redfin’s clients have to actually, well, see it.  If they don’t manage to hustle there during an open house, then they’re SOL — unless a Realtor-magic-key-toting Redfin agent comes by to open it.  And just like that, poof! goes half the business model.

Fast forward to today.  If you’re a Redfin client and you want a regular set of property showings, just give up a portion of the commission that was coming due to you and have Redfin show you around, just like a traditional broker would do.  Instead of getting 66% of the commission back, you get 50% back.

Possible explanations come from two different fronts:

First is my “Innovator’s Dilemma” proposition:   Redfin as a classic disruptive company, will first figure out how to be profitable serving the lower end of the market, the price-conscious clients that traditional brokers don’t mind losing.  Then it will move upmarket, charge more, and offer more service — ie. become more like a traditional brokerage, but with fatter margins.

At first glance, Redfin’s move seems to fit this pattern.  However. by Redfin’s own admission, they’re not growing as quickly as they would like, their business model is not as scalable as they had hoped, and they certainly are too young of a company to have taken significant market share yet.

So perhaps the better explanation comes from Mike Simonsen over at Altos Research.  Mike suggests it’s a simple pragmatic response to the harsh realities of the market place and their VC backers:  they need to become a $100M company as quickly as possible, and doing it at $10000 rather than $5000 per transaction will bring that about more quickly.

Other commentary:

• The Bloodhound notes that the rules around home showing seem strict and, well, a bit school-marm-ish.
• Greg Tracy suggests Redfin is becoming what they hate: a traditional brokerage.
• Jon Washburn notes the progression leading to this model and wonders if Redfin may end up becoming simply a lean-and-mean traditional brokerage.

Share This

I have to honest. I have been reading Kevin’s posts on social media and blogging, I am itching to write one on the topic myself since internet & blogging has done tremendous for my business. So here it is! (We will continue the regular programming on staging for next post I promise.)

I have been toying with Facebook a lot lately because I am intrigued of how this thing can work for my business (since I am spending a ridiculous amount of time on it) and how fun it actually can be even for work. Facebook has exploded on the business sphere lately largely because of its user-friendliness, much more professional look than myspace, and easy to network quickly with a string of people in a more relaxed atmosphere (they now even added a People You May Know section, which is frankly scary how they know I know these people).

At first I only used Facebook for contacting old college classmates & long lost friends, secretly comparing looking where they are working now how much weight they had gained, but lately I am finding a lot more business applications being developed and used, as well as an increased number of contacts in both staging and realtor fields. (Finally, no more of those invites of “Are You a Vampire?” but “Have my online business card.”)

I also read Guy Kawasaki’s 10 Things You Don’t Know About Facebook: “the fastest growing demographic on Facebook is those ages twenty-five and older. [per Facebook’s own stats] Facebook is quickly becoming not just place for friends to meet friends, but for business users, baby-boomers…”

Which prompted me to establish a “store front” (in Facebook lingo: Page) for my staging business. I listed my mission statement, basic info, even added blog syndications and apps such as charity that I personally support.

It’s an interesting experiment so far. According to Facebook’s stats, (or “Insights” per Facebook lingo) I have received 88 hits so far in the last 2 days. Although it is unclear where these traffic are coming from…. While my page is not like a major consumer product’s page, such as Dr. Pepper or Guiness where they have legion of fans who have the kind of viral power that can multiply consumer bases quickly and sell more products through their Facebook pages, I am interested to see how small businesses or professionals can use this to help them increase exposure.

Moreover, more and more people every day are joining for the sole purposes of prospecting and expanding networks. Similarly to LinkedIn, you can seek introductions via Facebook by simply “poking” someone to view their profiles, nudging them to respond and even visually displayed how many friends you have in common.

Similarly to twitter, you can update your status quickly via your mobiles or on the internet to let your sphere of influence, as well as millions of other users to know what you are doing.

I also have to say, the SEO on the Facebook page is SCARY. I only made it couple days ago, it already popped up on my google alert. I am experimenting and I plugged in “Burlingame” just now, to test and see if it will pop up on future searches.

What do you think? Any success stories so far? What do you use Facebook for? Be part of my social experiment by becoming a fan of my page at http://tinyurl.com/3jryvf. Or simply add me as your facebook friend

Share This

The gray lady herself comments today on the stress of blogging:  intense competition to be the first to break a story, the seemingly relentless need to be on top of all the news.

There is a cost to this:

Two weeks ago in North Lauderdale, Fla., funeral services were held for Russell Shaw, a prolific blogger on technology subjects who died at 60 of a heart attack. In December, another tech blogger, Marc Orchant, died at 50 of a massive coronary. A third, Om Malik, 41, survived a heart attack in December.

The article admits, of course, that “the premature demise of two people obviously does not qualify as an epidemic.”

My thoughts?  There’s more than enough stress in my life already, thank you very much, so I try to make sure blogging doesn’t add to this.  I’ve gone several weeks without posting when things just get too busy.  I find blogging in modest doses — say, 30 minutes per day — to be therapeutic.  I like writing, I like reading, I like the camaraderies and interaction.

So here then is my modest blogger manifesto, part serious, part humorous.  Tell me what you think!  Any more we should add to the list?

1. From Saturday at 6pm until Monday morning, no blogging.  [Present post excluded.]  There’s really nothing so important that it can’t wait till then.  [Again, excepting this article.]
2. No vendor pre-briefs less than 48 hours before the news embargo lifts.  I need time to digest the information and come up with a cogent response.
3. Once a month, I will prune my feed reader.  If I haven’t read a blog in a month, off it goes.
4. Many of us in real estate tend to be perfectionists, and our motto traditionally is, “Only perfect is good enough.”  Let’s turn that on its head and say:  “Good enough is perfect.”
5. If it’s starting to be a drag, then it’s time for a break.  A one week moratorium.
6. I will not take it personally when somebody in real estate says they’ve never read my blog, or they don’t know what a blog is.
7. I will not nickname any of my kids “Zillow” or “Trulia” or “Redfin.”
8. I will not obsessively update Wordpress to the latest platform.  Two upgrades per year are enough.
9. I will not tatoo my subscriber stats on my forehead.
10. Above all, I promise not to take myself, my blogging, or my blog more seriously that I need to.

Add your suggestions below…

Share This

Yes, the market is bad in many parts of the country — even many parts of the Bay Area.  But real estate, as the adage goes, is local, local, local — and in many of the good school district parts of the Bay, prices continue to go up and multiple offers are back in vogue.  Case in point — in the last week, there were at least two properties that sold with multiple offers — with “multiple” in this case meaning “more than 10.”

So, if you’re a buyer competing with other buyers, what should you do?  Our advice:  Pull out all the stops.  Here are some time-tested suggestions*:

1. Bring a large manila envelope stuffed with 100 dollar bills to the offer presentation.  Discreetly slip it to the listing agent.
2. Rename your first born after the owner of the property.  Bring said child to offer presentation, clearly labeled “I named him/her after you!”
3. Offer a 15-year free rent-back to the sellers.
4. Bring along your dream therapist.  Have him/her describe your last session in which you clearly saw yourself buying, owning, and living in the home.
5. Lobby congress to make it illegal to not accept your offer.
6. Stalk the seller for a few days ahead of the offer presentation.  Hold up signs saying, “Sell me your home!  Please!”
7. Add an extra zero to the price you’re offering.
8. Do a “presumptive close.”  The day of the offer presentation, show up with moving trucks, decorators, painters, and other assorted workmen.  Tell the current home owners you’re about to move in — didn’t they get the memo?
9. Bring along your burly cousin to the offering.  Have him sit menacingly in the corner, swinging a baseball bat.  Make oblique comments about “keeping him happy” and “how disappointed he’ll be if I don’t win the house.”
10. Put up a sign outside the offer presentation office saying, “The home has already sold!  Nah nah nah nah nah nah!”

* These suggestions are intended to be humorous.  Pleasure consult with your attorney and/or Realtor before following them.

Share This