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Public Service Announcement: Nationwide Home Mortgage Loan Company Is Stealing Content

May 14th, 2008 · 3 Comments

Nationwide Home Mortgage Loan Company is stealing content

Another despicable splogger is stealing content from various places on the Internet, including this blog.  Sadly, the side gives no contact information, so I’m not able to send my usual polite “cease and desist” notice.

Hopefully this post and picture — which will soon appear on the Nationwide Home Mortgage Loan Corporate blog — will embarrass the owners into stopping this nonsense.

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Tags: Industry

Symantec Issues High-Priority Security Patch For Trulia Widgets, Called “Worst Peloponnesian Unicorn” Ever

May 8th, 2008 · 13 Comments

trulia-in-computer.gifSymantec, 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.

;
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.
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Tags: Humor · Industry · Trulia

A Perfect Example Of Co-opetition: The Real Estate Industry … Barry Nalebuff Would Be Proud

May 6th, 2008 · 2 Comments

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.

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Tags: Barry Nalebuff · Industry · MLS · Real estate · Trulia

Lies, Damn Lies, And Statistics: What Mark Twain and Benjamin Disraeli Would Say About Menlo Park’s Median Price Numbers (Part 2)

May 4th, 2008 · 1 Comment

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.

Menlo Park Real Estate Numbers

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.

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Tags: Consumer · Industry · Menlo Park

Redfin Select: School-Marmish Innovator’s Dilemma? Becoming What They Hate?

April 8th, 2008 · 3 Comments

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 ResearchMike 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:

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Tags: Business models · Consumer · Industry · Innovators Dilemma · Redfin

Blogging Stressing You Out? You’re Not Alone, Says The New York Times. A Modest Blogger Manifesto…

April 6th, 2008 · 8 Comments

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…

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What Bad Housing Market? What We Need Are Tips On How To Win Multiple Offer Situations

April 4th, 2008 · 3 Comments

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.

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Is Social Media A Waste Of Time? Texas Realtor Magazine: Yes. Sherry Chris, Better Homes And Gardens: No.

April 3rd, 2008 · 8 Comments

Michael Parker of Blackwater Consulting Group, writing in the Texas Realtor Magazine, says “Yes”:

I respectfully call social networking and Web 2.0 great hype with great future promise. I just don’t think they help sell houses today in any proportion to the emphasis they are receiving.

[Sidenote:  What’s Michael doing writing an article about social media in a Realtor magazine?  Shouldn’t he be protecting diplomats in Iraq?  Oh, wait a minute — that’s the other Blackwater.]

Michael raises some very interesting points, definitely worth addressing in a future post.

Sherry Chris, CEO of Better Homes and Gardens Real Estate*, however, begs to differ.

Friend and business colleague Pat “Transparent Real Estate” Kitano and I had the privilege of meeting Sherry and Camilla — BHG’s new head of marketing — over breakfast recently.  Sherry’s team has the exciting task of building a brand new nationwide real estate franchise from scratch, but with the incredible advantage of using a name with incredible brand equity.  They’re pulling out all the stops in their pre-launch efforts, including some very interesting online social media initiatives, with participation from the whole executive team.

Taking a page from Rudy and Joe, Sherry always has a video camera with her, and she made the mistake of interviewing Pat and me.  Whether it was the content or the participants that caused this, I’m not sure — but the hotel did give her grief about filming without permission.


* Better Homes and Gardens Real Estate is a client of Domus Consulting, a sister company of 3 Oceans Real Estate.

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Irony Of Ironies: The Mechanical Turk Behind The “Zestimate of Mortgages” Turns Out To Be Not An Algorithm … But A Real Live Mortgage Person!

April 2nd, 2008 · 7 Comments

Zillow, the perennial surprise-maker of online real estate, has just launched its long-anticipated foray into the mortgage world with a “Mortgage Marketplace.”  The company’s original online real estate product — the controversial “Zestimate” — is a computer algorithm estimating the value of homes.  The logical mechanism behind a “Mortgage Marketplace” would thus also be a computer algorithm — say, a mortgage pricing engine that spits out rates from lenders based on the borrower’s situation.

In a delicious twist of irony, however, the mechanical Turk behind this new product is … a person.  As in, homo sapien.  Specifically, a mortgage professional.

In a pre-launch briefing with What would David Gibbons do” David Gibbons, he described the all-too-typical grief that a potential borrower goes through with many lenders, whether online or offline:  bait-and-switch salesmanship, hidden fees, inflated rates, and perhaps most egregiously, a complete lack of anonymity.

Zillow’s solution?  Let consumers ask for mortgage quotes without revealing their name.  Let mortgage brokers respond to these requests.  Let consumers sift through the responses and choose the broker they want to work with; then and only then does the buyer have to reveal his or her name.

What about the whole bait-and-switch thing?  Zillow deals with that in a very Web 2.0 way — consumer reviews of mortgage broker performance.  Plus, the participating mortgage brokers are vetted — at least minimally — to confirm that they are, in fact, licensed mortgage brokers.

And here’s something sure to make at least some mortgage brokers sweat a bit:  the competing mortgage offers are visible not just to the consumer who requested them…but also to the other mortgage brokers who submitted offers!

The cost to mortgage brokers?  Zero.  In David’s words, Zillow remains committed to being an advertising platform.  The data they can now gather about consumers — what their home is worth, other homes they’re interested in, and now their income and credit score — makes it possible to target-advertise with nearly pinpoint precision.  David assures us this is not being done in a “Big Brother” kind of way, but if I understand him correctly it may soon be possible, for instance, for Mercedes to target ads that will appear only in front of prospective buyers with an income of at least $100K and a credit score of at least 720.

Other commentary:

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Market Bottom Officially Reached At 2:34pm This Afternoon; Impasse Between Buyers And Sellers Finally Resolved

April 1st, 2008 · 4 Comments

The news that all fence-sitters have been waiting for finally happened: at 2:34pm this afternoon, the bottom of the real estate market was officially reached when 356 Avocado Lane in Stockton finally sold — with multiple offers — after 30 months on the market.

Said listing agent Trevor Blackstone of Stockton Realty: “Phew! I’m glad that’s over. I’m the fifth Realtor for these folks! They went on the market at $750,000 and after 25 price reductions they finally reduced it $275,000 and it sold! In fact, we got two offers, both just above the list price.”

CAR chief economist Leslie Appleton-Young broke out the champaign at CAR headquarters in Los Angeles. “We’ve been keeping our eyes on that property for a long time. We knew that when it sold, the housing recession would officially be over.”

Mike Simonsen over at Altos Research had this to say: “Our charts predicted this a few months ago already. The 7-day rolling average of the ratio of the median days on market for the upper quartile in the worst area of Stockton has been steadily moving upwards. That’s the sign that’s accurately predicted the bottom of every single market since 1900!

TJ Shanahan of Realty World in Sacramento was also not surprised. “Seven of my top 10 ways of predicting the market bottom came true literally in the last week!”

Astoundingly, every single market bottom has also happened on April 1st, and at the exact same time. Here’s the Altos Chart to prove it:

timing-the-bottom-of-the-market.gif

Bubblistas are already salivating over the next real estate recession, scheduled to start in late 2024. The domains IToldYouSo.blog and WorstHousingRecessionEverWillStartIn2024.com have already been reserved. “In the meantime,” said a prominent bubblista, “I’m gonna stay renting.”

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Tags: Consumer · Industry