Insomniac Dustin Luther couldn’t quite stay up late enough last night to witness the launch of the US version of Dothomes.com. But here it is, yet another real estate search site: dothomes.com, already live in South Africa and the UK.

I commented yesterday that recent property search entrant Roost.com’s business model is clever, unique, and possibly illegal non-MLS-complaint.  [1/30/08 update:  I’ve been thinking about my choice of words, and “illegal” is definitely not the word I should have used.  “Illegal” is mugging somebody, or stealing something.  What Roost is doing is 100% legal and above-board.  It may — and I emphasize may — be viewed by some as being non-MLS-compliant.]

A first glance at Dothomes suggests a similar, though unfortunately more damning verdict: extremely clever, very unique, and definitely illegal non-MLS complaint.  [1/30/08 update:  What Dothomes is doing is absolutely 100% legal, but again may be interpreted by some as being non-MLS compliant.]

The clever and unique part is easy to see: they’ve managed to pull off what Google Base real estate could have been, and may well still become: a Google-ish type search experience — with a whimsical “I’m feeling wealthy” instead of “I’m feeling lucky” button — where instead of choosing your criteria from input boxes or sliders, you simply type in what you’re looking for.

Right-oh then, let’s give it a try, shall we?

And, as the Brits would say, “Bob’s your uncle!”

A quick glance at the 99 results confirmed that they all had 3 bedrooms and were under $850K. Pretty slick! (As a sidenote, many of the results were in South San Francisco, an entirely different city. But I’ll cut them some slack on what is, after all, a pretty new product.)

So that’s the clever and unique part. Here’s the (tragically) illegal non-compliant part: per their own FAQ/blog, they get their data from either a feed that a broker sets up or by crawling the broker’s site.

From a feed the broker sets up: So far, so good…as long as it’s only that broker’s listings.

By crawling that broker’s site: At most MLS’s this is strictly verboten.

Most of the first few pages contained only listings from Realogy brands Coldwell Banker and Century 21. Since Realogy has been fairly open of late with distributing their inventory online — e.g. with Trulia — it is possible that Dothomes has an agreement with Realogy, though I have not heard such news.

A few pages later I see a few listings from my ex-Broker Alain Pinel Realtors. Now the warning bells sound. Unless things have changed dramatically since I left a few months ago, Alain Pinel would never ever distribute its listings to a non-IDX site — Trulia being the exception (probably because Sami is such a sweet talker!)

My prediction: tragically, Dothomes will be forced fairly quickly to adopt an alternate and legal listings acquisition strategy: either MLS-by-MLS, or broker-by-broker.

Further commentary:

• Future of Real Estate Marketing weighs in.
• Mashable wonders if Dothomes will be able to compete against Trulia et. al.
• SearchEngineLand notes that in real estate search, just like travel search, there is no one comprehensive site with all listings. (Realtor.com could lay claim to the title of “most listings” by virtue of having most broker-listed homes, but it does not include FSBO’s…plus the site just, well…sucks)
• Todd Carpenter, in what I believe is a quote from Dothomes founder Douglas De Jager, says:
  

  Because DotHomes does not serve up those details pages, they do not need permission from the listing agents.
  

  I hope this isn’t Dothomes’ understanding of what most American MLS’s allow, because if it is, he’s in for a nasty surprise.

Tags: Alternative business models, Century 21, Coldwell Banker, Industry, MLS, Realogy

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If you are a reader of The San Jose Mercury News, or any other paper or media outlet, you know that there is a growing issue associated with home buyers who purchased their homes using subprime loans and are now facing foreclosure as they are unable to keep up with their payments when their rates adjust.

On Sunday, March 17, the San Jose Mercury News ran an article describing how an agent and lender with Century 21 Su Casa Realty violated a number of lending laws and ethical guidelines to get people to purchase homes which are now in foreclosure, in some case because the buyers couldn’t even afford the first payment.

While it is a stain on the already tarnished image of Realtors, it is easy for us in Palo Alto to say ‘what a shame, it won’t happen here’, or words to that effect. But, what is the effect of this issue on homebuyers in Palo Alto and the surrounding communities?

Rachel Van Emon with OPES Advisors, a financial services firm with offices in Palo Alto and San Mateo, recently sent me an article that discusses the effects of impending legislation and revised lending guidelines that will affect the ability of buyers to qualify for products like the interest only loans that so many of us use to buy our million dollar teardowns in Palo Alto and surrounding communities.

The highlights are:

• The Department of the Treasury has issued a Guidance on Guidance on “Nontraditional Mortgage Product Risks.”
• The Guidance specifies “nontraditional” as those loans allowing the deferment of principal and/or interest payments – not just sub-prime loans.
• The Guidance states that borrowers for these products are to be qualified at the “fully amortizing and fully indexed payments.” This means that qualifying payments will be bigger, and it will take more income to qualify.
• The new guidelines are to be in effect by 9/07. Some lenders have already adopted them, and many more will do so in the coming months.
• Virtually all lenders have cancelled their programs allowing 100% financing on a Stated Income basis.
• Guidelines have tightened around lending when other “risk factors” are present such as 100% financing, low reserves, high debt-to-income ratios and condo properties.

In short, it’s going to be harder to pay for that million dollar teardown in Palo Alto starting now, and especially in September.

The big question is whether these changes in lending laws will cool the red hot housing market we are currently enjoying, or if the Valley’s amazing ability to generate disposable incomes and wealth will overcome another hurdle to home ownership. Stay tuned . . .

The entire article is posted for your reading pleasure. Click here to view it.

Tags: Bad-Realtors, Century 21, Crooked-realtors, Deceptive-realtors, Dirty agent tricks, Financing-Process, Loan Application, Loan-Application, Mortgages, Negative Amortization, No Documentation (ND), No Income No Assets (NINA), No Ratio (NR), Option ARMs, Palo Alto, palo-alto-real-estate, Preapproval, Prequalification, Real estate, Realtors who give the business a bad name, Stated Income Stated Assets (SISA), Stated Income Verified Assets (SIVA)

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Hot on the heels of Trulia’s announcement that Keller Williams’ listings will soon be added to Trulia’s database, now the company can proudly boast that another giant — Realogy — is on board. Included in Realogy’s portfolio are the giants Century 21, Coldwell Banker, and ERA.

Trulia has been slowly building its relationships with brokerages around the country to get their listings on board, and has won the trust of the industry — naturally wary of online predators who take the listings, snazz them up, and then sell them back as leads — by faithfully directing traffic back to the brokerage’s sites and staying true to its promise of making money only through advertising.

Don’t know how I missed this promo when it launched on Youtube late last year, but here’s some slick advertising for the company, featuring, amongst others, Alain Pinel’s CEO Larry Knapp.

This is where things start to get interesting. While Trulia’s search experience has always been at least on par with the best real estate search engines out there, its relative dearth of inventory — compared to broker-run and MLS-run sites — has been its Achilles heel. Sure, it’s always been fun and cool to search on their site, but in the early days when their site had only 20% of the listings in an area, many would have sacrificed Trulia’s coolness for the completeness of less cool sites.When Trulia got up to 50%, the same could perhaps be said. With Keller Williams and the Realogy giants now on board — as well as the large local players, like Intero and Alain Pinel Realtors here in the Bay Area — they could well soon reach the tipping point of, say, 80%, after which the remaining stragglers will have no choice but to go on board as Trulia becomes a more popular search destination.

It’s unlikely Trulia would ever have 100% of the listings in any given area because of the “long tail” nature of listings. In our MLS catchment area, for instance, there are currently 4110 active listings, of which fully 536 are from brokerages that currently have only 1 listing. There’s simply no way Trulia can knock on the doors of all these brokerages to get those stragglers, so the company will have to rely on the “me-too” syndrome for them to join.

Tags: Alain Pinel Realtors, Century 21, Coldwell Banker, ERA, Intero, Intero Real Estate, Larry-Knapp, Real estate, Realogy, Trulia

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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?

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

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