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Entries Tagged as 'ReMax'

As The Market Slows, Lawyers are Salivating, Part 2

April 14th, 2008 · No Comments

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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Tags: * Type of Content · Buyer · Consumer · Deceptive realtors · Disclosures · Humor · Industry · Mortgage · ReMax · Realtors who give the business a bad name · Transparency · Types of realtors

How Come Redfin’s P&L Looks Distinctly Unlike That Of A Traditional Real Estate Brokerage? Because Redfin Is Actually A Brokerage, Not A Landlord!

October 1st, 2007 · 8 Comments

Tipped off by another insightful Greg Swann piece (Greg — do you ever sleep?) I just read through Glenn Kelman’s fascinating soul-baring finances-revealing post over on Guy Kawasaki’s blog. As a serial entrepreneur — and quite a successful one at that — Glenn has certainly done more than his fair share of financial modeling, and his post is rich in advice for the prospective entrepreneur.

What is particularly fascinating is how Redfin’s financial modeling is thoroughly and utterly unlike that of a traditional broker. That makes sense, of course, since Redfin is, well, not a traditional broker. In particular, unlike traditional brokers, Redfin makes its money through the act of – wait for it — brokerage — that is, representing buyers and sellers of homes.

Traditional brokerages — Coldwell Banker, Prudential, ReMax, Keller Williams, Alain Pinel — on the other hand, most emphatically do not make money through brokerage activities — they leave that work to their agent work force, usually a collection of independent contractors. Traditional brokerages, you see, make their money through landlording.
They provide agents with office space, training, mentoring, branding, open house opportunities, telephone lines, etc. and then charge these agents twofold: first, a portion of their commissions (starting at 50% or more for new agents, going down to perhaps 5% or 10% for the top agents, averaging perhaps around 25%) and secondly, a rather long laundry list of fees, including tech fees, desk fees, legal fees, and a myriad of others.

Much of what remains in the agent’s pocket after the broker’s share is divvied up among countless vendors, including the local MLS, newspapers, cell phone carriers, web site vendors, and Lexus dealers.

Here’s a picture of the money trail:Redfin is a brokerage; traditional brokerages are landlords; P&L helps to show the difference

…and here’s one of them new-fangled Sketchcasts…

Further commentary from others:

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Tags: Alain Pinel · Coldwell Banker · Glenn Kelman · Industry · Keller Williams · ReMax · Redfin

Zillow’s advertisers reaching lucrative segment

October 25th, 2006 · No Comments

David G. from Zillow — rumored to have implanted a chip in his brain that notifies him whenever a Technorati Zillow-tagged blog entry gets posted :) — noted in comments to my previous post that 86% of Zillow users own their own home, compared to the 69% nationwide average home ownership rate.

First, it makes good sense that the large majority of Zillow users are homeowners. I wouldn’t be surprised if the remaining 14% intend to become homeowners.
Secondly, since homeowners are on the whole more wealthy than renters, David G. points out that Zillow’s audience probably skews towards the higher end income bracket.

What does this mean for us real estate professionals? Quite simple: If Zillow is frequented by relatively wealth homeowners with a strong interest in real estate and by non-homeowners who for some reason also have a strong interest in real estate…then why the heck aren’t more of us advertising on there?

The usual real estate brokerage suspects are there — ZipRealty as well as everybody’s favorite punching bag Redfin, whose CEO Glenn Kelman was recently nominated by none other than Greg Swann as “the maverick of greatest contemporary influence on the real estate industry”.

Where are the others, the large, more traditional brokers? Where’s Coldwell Banker and its Cendant/Realogy Brethren Century 21, ERA, and Sotheby’s? What about Prudential and ReMax? What about my broker, Alain Pinel Realtors, a local powerhouse?

If your advertising dollars are worth spending on ads in print publications like Gentry and the Wall Street Journal, why not on Zillow?

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Tags: Advertising · Alain Pinel Realtors · Century 21 · Coldwell Banker · ERA · Glenn Kelman · Online advertising · ReMax · Real estate · Realogy · Redfin · Sotheby's · Zillow · Zip Realty