I’ve been accused — rightly, I might add — of being a geek. I also happen to be in real estate. You put the two together, plus a keen interest in using new social media tools like Twitter, and what do you get? The Twitter-MLS!

For a long time, MLS searches have been available via email. Recently, some real estate search providers — like our friends at Trulia and at Diverse Solutions — have enabled MLS searches via RSS feeds. (That’s actually the technology I use on the sidebar to provide the link searches.)

As the latest new big online thing, Twitter has attracted a massive cult following, and as a permission-based communication tool, it’s ideal for sending out news snippets such as new listings.

Here’s how it works:

1. Sign up for an account at Twitter if you haven’t done so already.
2. Head thither and “follow” my Twitter “Menlo Park MLS” account. Other towns in the Bay Area will follow shortly.
3. Sit back and enjoy the “tweets” that will come your way by cell phone, email, Twhirl, online (depending on how you configure Twitter). These “tweets” will be little news snippets about new homes to hit the market. Want more details? Click on the link in the tweet and you’ll see pictures, details, and much much more.

If you’re more of a FriendFeed type, I have the same offering available in FriendFeed room format. Find your way yonder, select your favorite city, and click “Join This Room.” And, as our British cousins would say, “Bob’s your uncle!”

FriendFeed room example for Burlingame:

Twitter example for Menlo Park:

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Long-time Mortgage Mania readers, (aka Mortgage Maniacs) know that I’m an avid reader of the New York Times, so it should come as no surprise that I would have some comments on this article in the Friday June 6 edition regarding the continuing foreclosure crisis affecting consumers across the country.

Authors Bajaj and Grynbaum review some recent statistics on foreclosures, and then go on to predict another wave of foreclosures as the economy continues to slow and more consumers fall victim to layoffs and job cuts.

It’s easy to ignore these rumblings here in wealthy Silicon Valley where the local economy is still vibrant, even with nearly $5 a gallon gas, as it is still a minor impact on a budget with a $5,000 a month mortgage. It’s easy for us living in The Bubble of Unstoppable Real Estate (which I define as: Palo Alto, Menlo Park, and Los Altos, your mileage may vary) to say “it can’t happen here”.

Not so fast there pardner. A Short Sale in Atherton you say? It’s almost enough to make you drop your Grey Poupon.

This little number at 199 Selby Lane in Atherton recently listed by Lanny Dannenberg of Keller Williams is a short sale at $1,795,000. It has been on the market with a couple of different brokers for over two years, starting at $2,495,000 in March of 2006.

The good news is that the local market continues to be pretty strong, especially at the upper levels, above $3 million. Don’t take my word for it, check out this market data for the latest facts and figures on Palo Alto and surrounding communities.

Thanks for reading . . .

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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.

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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.

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Lost in the ongoing discussion about Redfin’s recent appearance on the Today Show is the blatant Redfin geek-baiting of their “Redfin Scientist” marketing push.

Many Realtors have looked at this document with it’s “No, duh!” recommendations (stay engaged, don’t overprice your property, do advertise it on the web) and thought, “I don’t need any ’scientist’ or ‘research paper’ to tell me that!  It’s just obvious!!!”

It may be obvious or it may not be obvious, but here’s the stroke of genius on Redfin’s part:  one of their core target demographics — Gen  X and Y geeks living in high-priced markets — tend to not take our assertions as fact until they see the underlying data-driven proof.

As a Gen X geek myself, I completely relate.  When the old-timers in the business say, “This doesn’t feel like a normal Fall market”, I don’t take it on faith.  I download a data set from the MLS, crunch some numbers, and come to my own conclusion.  Far more often than not, the old-timers’ intuition is spot on…but I’m not comfortable with their assertions until I see them backed up with data.

If I had a nickel for every time a Realtor told a prospective client at a listing appointment “Don’t overprice your home” but provided no hard data to back up that assertion, I’d have retired a long time ago.  Many folks are comfortable with assertions, but “geeks” (which I define as data-driven technology lovers) for the most part want the numbers.

Redfin recognizes this and gives it to them.

Traditional real estate advertising targets a geographic niche, typically a town or neighborhood.  One of Redfin’s primary niches — perhaps their largest one — is a demographic niche:  the geek market, or, more precisely, geeks in high-priced markets.  And guess what?  Seattle and the Bay Area, their two primary markets are not only expensive but are also full of geeks!  I have no inside information about their sales numbers, but I wouldn’t be a bit surprised if 25% of their Seattle business consists of Google and Microsoft employees.

The lesson in all this?  Know thy customer.  If you’re Redfin and your customer is a geek, give him the numbers.  State the obvious, state the not-so-obvious…but back it up with numbers.  Future studies I’d like to see coming out of Redfin’s scientists (or heck, maybe I’ll do them myself) include:

• Staging your home is a positive ROI investment.  Really?  Show me the numbers.  I suspect it’s true, but I’d love to see a study that compares the sales price of, say, $800K homes with and without staging.  Do the homeowners that invest $5,000 in staging really sell their home for at least $5000 more than the ones who don’t?
• Taking more and better pictures of your home makes your home sell quicker and for more money.  I’ve seen the numbers that prove a listing with more and better pictures gets a lot more online views, but do those views translate into more open house visitors and eventually into a higher price?
• Selling your home with a full-service broker will net you more than going with a discount broker.  Again, a common assertion.  Show me the data!  If, for instance, the average full-service commission in an area is 5.5% and the average discount commission in an area is 3.5%, are full-service brokers typically able to get a 2% or greater premium on the sales price?

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No one can doubt Redfin’s Glenn Kelman is a master of publicity; witness his latest publicity coup: getting on the Today Show to talk real estate with Meredith Vieira. The re.net was abuzz, from Joel Burslem’s neutral coverage to the Bloodhound’s  semi-excoriating review to a withering ActiveRain critique on the “obviousness” of what Kelman said.

The joke, I would say, is on us. To anybody who’s been in the business for any length of time, Kelman’s advice — don’t overprice the home, do advertise on Craigslist — is painfully second nature.

But here’s the point: Kelman is a master genius at generating publicity around knowledge that we take for granted. So it’s obvious to you as a professional Realtor that overpricing a home is the kiss of death? But you’ve never created any marketing buzz around that! You instinctively know to push for a price of $749,000 rather than $751,000? Glenn Kelman just beat you at getting the phone to ring by spinning that message in the right way!

A further irony: this is really nothing more than a repetition of the same mistake we’ve made for decades in this business: assuming that our intellectual assets have greatest value when we hide them from the public and use it as bait to get them to call.  For many years, we hoarded MLS information in book form and made the public come to us to get it.  When the Internet came along, we figured we could do the same thing.  Oops!  Companies like HomeGain figured out a way to use online MLS information to get their phones to ring, and forwarded the leads to us…for a fee.

Then we thought, “Ok, we’ll let the public have information about active listings, but as soon as a listing sells, we’ll hide it again.  Hee hee…this will force people to call us for that kind of information!”  Oops!  This now-you-see-it-now-you-don’t mentality opened up an opportunity for some very smart and deep-pocketed folks from Seattle to start a web site which, among other things, enabled the public to find out what homes sold for.  Zillow realized what we didn’t:  there is great marketing value in letting the world know what you know, rather than trying to hide it.  (See this article I wrote about a year ago on the gold buried in our MLS’s.)

Come on folks, when are we going to learn our lesson?   In the Internet age, you don’t win clients by giving only a sneak preview of your knowledge and data and then crossing your fingers that they will come to you in pursuit of the rest of it.  The game now is transparency — I know, an overused term perhaps, but true nonetheless.  You develop a followership by demonstrating your value, and you do that partly by showing what you know.

What “obvious” thing do you know that may have marketing value for your business?

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I know, confusing headline.  But that’s what you get when you combine a show with Today in the title, and an event that’s happening one day in the future.

I’ve been sworn to secrecy by Redfin’s PR maven Cynthia Pang until 9:01pm PST tonight (under pain of death, I’m told — though Redfin’s own Matt Goyer apparently broke the embargo early.)  It will, of course, be a live event, so we’ll see how Glenn Kelman holds up under the klieg lights.  (Fortunately for him, Kris Berg is not, as far as I know, conducting the interview.)

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As I previously reported, Foxton’s the now-defunct east coast discount shop, is, well, defunct.  They recently fired most of their staff and declared bankruptcy.  What to do with the thousands of listings they had, however?

RIS Media reports that a tranche of some 1400 of them have been taken over by another broker, Fillmore, for about $110,000, which puts a value of $78.57 per discount listing.  With most agents spending hundreds or thousands of dollars in acquisition costs per listing, this sounds like an absolute bargain.

However…these being discount listings, the math might be different.  For a full service listing netting, say, 2.5% on the listing side, I’d be willing to pay significantly more than $78.57.  I believe Foxton’s, however, only charged a few thousand dollars per listing, out of which they had to cover employee costs (their agents were largely salaried, not commissioned), office costs, and the nifty little cars each agent got.  This model only works well in volume, when the market is spinning along comfortably.  With the market slowdown, however, things didn’t go so well.  As Foxton’s VP of Sales Mark Horvat delicately puts it:

We regret to inform you that, due to the recent down turn in the residential real estate market, Foxtons has decided to conduct an orderly liquidation of its business.

If Foxton’s couldn’t make it happen with their fees, how will Fillmore manage it?  Only two ways to do so profitable that I can see:

1. Charge more.  This is a non-starter, however.  The listing agreement that Foxton’s clients signed specified a certain listing fee, and Fillmore would be contractually bound.  Mark Horvat again:With the exception of the identity of the listing broker, all of the terms of your listing agreement with Foxtons would remain the same.
2. Lower costs.  Fillmore doesn’t seem to be going down this road either.  It appears they’ll be launching new satellite offices, hiring some 40 top-performing Foxton’s agents, buying their agents laptops, renting them cars, and putting them through their “Fillmore University” training program.

The math just doesn’t make sense to me.  If Foxton’s couldn’t swing it financially, how is this not financial suicide for Fillmore to take over the listings at the same fee, with the same cost structure?  What am I missing?

Foxton’s did not, apparently, have any Boston coverage.  If it did, I find myself wondering if Redfin might have tried to purchase any of those listings.

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I’m normally too busy to bother paying much attention to the growing legion of sploggers out there.  If a post or two of mine gets “borrowed” (with or without a linkback) I normally let it slide, but I definitely start complaining if it becomes habitual.  Most sploggers ride on a modest wave of Google Adwords-funded revenue for a few weeks, get shut down, and then move on.  Sometimes a new re.net blogger springs up and decides it’s easier to “borrow” than to write content, but after a few polite email exchanges and explanations, they tend to shape up.

Occasionally, however, a pretty egregious case of content-borrowing comes across the transom.  Imagine my surprise when this latest splog incarnation turned out to be affiliated with Brokers USA — whom I shall not grace with a linkback — which appears to be a respectable, buttoned-up, long-standing San Francisco real estate firm specializing in hospitality properties.

The site’s blog has 2 loooong content pages — which translated into roughly 180 pages when I saved them in a PDF.  A few minutes of perusing these pages found content from

• My blog
• Redfin’s Bay Area blog
• Curbed.com
• SocketSite
  and, perhaps most creatively
• Trulia Voices

The latter included a question on HUD ownership, graciously answered by Kristal Kraft and a few others.

In all fairness to the site’s “author” Gregory Garver, he responded fairly quickly to my email and fax request to take down my content.  His response, however, indicates that he may not yet understand the basic decorum around blogging.  Perhaps UCSB, his apparent alma mater, had no rules against plagiarism?

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It’s been a busy few weeks here at 3 Oceans.  Some eagle-eyed viewers may have noticed that my byline recently changed from Kevin Boer, Realtor, Alain Pinel Realtors to Kevin Boer, Broker/Owner, 3 Oceans Real Estate, Inc.

I’m pleased to announce that 3 Oceans is now more than a blog — it is, in fact, now a full-fledged boutique real estate brokerage.  I recently got the final paperwork from Sacramento, and today I officially handed in my keys to my old broker, Alain Pinel.

I’ve thoroughly enjoyed my 3.5 years at Alain Pinel, learned a ton, and made great friends.  The time has come, however, for me to move on and further leverage the exposure this blog has given me.  I have many innovative business ideas I’ll be implementing, many of which would have been difficult to do while at a traditional brokerage.

If you still have my email address, please be sure to change it to

I think this means I now need to double-check and counter-sign my own paperwork?

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