Expensive usually means that something costs a lot.  That is a really bad definition.

I remember trying to talk my parents into buying me a pair of Nike shoes way back when. All they saw was the cost.  I saw opportunity.  The Nike shoes would obviously make me run faster, jump higher and inevitably propel me into an improved social circle.  Certainly the $50 price tag might have seemed a little pricey to the untrained observer but as any ten year old could tell you, sometimes you need to “just do it.”

Most children can see the big picture.  They see the benefits the product brings to the table at least in terms of the instant gratification they’ll get.  They understand how the product will affect the complex social interactions of junior high and why they need to have it now before it is too late.  By the time they turn into full grown business managers though, they’ve lost their vision.  Adults slowly beat it into your mind that price is the most important thing.  “How much money will the purchase take out of your pocket?”

I try to think of it differently.  “How much money will the purchase put in my pocket.”

If I spend $200 on marketing that doesn’t bring me any business.   That’s expensive.

If I spend $20,000 on marketing that makes my phone ring off the hook, marketing that nets me $100,000 or more, that’s not expensive, that’s shrewd business.  A great deal.

Somewhere along the line you need to make assumptions and projections in order to determine if there is going to be a benefit that is worth your investment.  Return on investment (ROI) is only a certainty after the fact.  There is no certainty but if you can find that childlike vision you used to have, maybe you can get past the price and look for the benefits.

Greg over at Blueroof.com did,

Instead of creating well-designed websites that offer real value to the consumer, agents usually either get a cheap  template just to have a website or they pay a technology company (Trulia/Realtor.com/Zillow) for leads. I understand why- it’s a lot easier and much less expensive to build a custom site. Custom websites can cost a lot. I spent well over six figures on BlueRoof.com, and it’s tough to pay that kind of money, especially if you have no experience converting online leads and have no idea what sort of return (if any) on your investment you’ll get. But help is on the way.

… I closed over 100 homes in 2007 from buyers and sellers we met through my website (of course I have a team of buyer’s agent also). These consumers all felt as though they were given value on the website and they used the website and contacted us because of it. If you want a better brand of business and want to build your team and business in 2008, stay tuned in January- when I discuss a new system that I think will offer more value for agents, and more value for the consumer. – Greg at Blueroof.com

That sounds like a deal to me.  I look forward to seeing what’s in store.

I’ll admit it. I love to research. I don’t like surprises. I want to know everything I could possibly find out about the agent I’m dealing with and his or her client. How much business do they do? Is the agent busy or just faking it? What’s their style, what’s their office like? Do they need the money? How long have they been in the business? Do they have any listings? What have they sold? What’s their target market, if any? What does the buyer currently own? Are they selling anything? Where does the buyer work?…oh it goes on and on. Anything on Google?

I love to encourage conversation. Even aimless banter. I like the agents to like me and feel comfortable and confident dealing with me. They should; I wouldn’t do anything shady, illegal or even underhanded. But that doesn’t mean I’m not working for my client. If my client wants a certain goal to be achieved, that’s my aim and I work very hard to gain any ground I can.

Everyone gives up little clues about their motivations, but they don’t always know they’re doing it. That’s why I don’t want my sellers having any sort of contact with the other agents or their clients. It’s also why I don’t want my buyers being too interested in the site of the homeowners. Any sort of contact is compromising my power to negotiate. An agent should be insulation from these situations.

I think of real estate business like a high stakes game of poker. I can’t see the cards but I can read the signals. There are sharks out there while others are just minnows. I’m not a shark but I play one on TV. Which one are you?

Before I made the decision to pursue real estate full time, I had considered getting into the mortgage business. What I found was just about anyone would ‘hire’ you on as a mortgage broker. Why? Because they would provide almost no support for you but take half of what was made on a loan. They knew that in most cases, a mortgage broker would come on, refinance their friend and family then wash out of the business. So they attempt to capture a larger share of the market with a networking through expansion method.

I can’t help but think many large real estate brokerages are doing the same. For example, I recently talked to an agent in a large brokerage who said that they shared an office with less than 20 desks with over 300 agents. This office represents a small area of Denver, so I would assume that there is alot of overlap between the agents. Most businesses in sales don’t have that many agents for a small area. It wouldn’t be fair to the salespeople. They would limit the number of agents so their agents would be as busy as they would like to be while still achieving saturation. But the truth about real estate is that brokerages make a lot of money off the agents themselves through various fees. They also know that the new agent will immediately go after their friends and family who might not otherwise use their company. So on top of the fees, there is perhaps another $10,000 to $20,000 to be made simply by bringing on another agent who may even be paying you to be there. Of course, most agents won’t be successful but the brokerage doesn’t really care. Most brokerages provide general training and services to make it appear that they want an agent to succeed but the truth is their business model is at odds with that premise.

To establish yourself in real estate requires time. If you’ve been in the business long enough, you have made the contacts and have the client base to pull from to sustain yourself. If you’re new to the business, you need to build your business in the face of a vast and entrenched competition. But the brokerages tell you you shouldn’t drop your commissions. They then proceed to charge you enough or split the commission in such a way that you agree, “There’s no way I could work for less.” There is no way that these agents that have no momentum will ever gain a foothold against the entrenched agents who are actively marketing in a neighborhood. So the new agents are left to help their friends and family (assuming there are not more agents in the family) then slowly fade away, back into the careers they came from.

Technorati Tags: Denver, Real, Estate, Brokerage, Business_Models

Steve’s seems to be trying to get his fingers on the pulse of real estate but can’t seem to get past the waiting room. I spoke with Steve on the phone after he wrote an article in the December issue of Money Magazine, “Best Ideas for 2007″. I had disagreed with him on many of the assertions he had made regarding strategies buyers could use to get a better deal. To be fair, I agreed strongly with his suggestions for sellers. In our conversation, he admitted that he ‘doesn’t have access to the same information that agents have’. Thus he has to “rely on other people” in order to write these real estate articles. He’s essentially trying to analyze data from hundreds of markets and collate that into advice that could be applicable nationwide.  He’s not an expert in the sense of personal experience but rather is forced to rely on so-called experts from across the country to give him accurate information regarding the stories he researches in order to make the valuable conclusions. I’m honored that I can fall into that category. Unfortunately, I disagree with some of the advice in the latest article. It seems the article plays more to what buyers would want to believe rather than the truth about what will help get you a better deal.  But then again,  who knows what agents across the country tell him.  This is how it works in Denver and what I disagreed with…

(If your not sure what commissions are and how they work, check the end of this post)

 Why would offering more money to a buyers agent work? Because brokers want to make a living and will be more likely to show your place in among others of the same type. This is often true in the case in newer condos or builder-owned homes where there is often a lot of competition. If you have ten other condos in your building that are essentially the same home at the same price, and then there are lots of other condos in other buildings, most agents want to narrow down what building their client wants before showing them everything that is available in one building. There are literally hundreds of condos that are similar. Do you want to go view all of them or would you like someone to help narrow it down? Most people would like some help here. Well, if I have to pick which one to show first, and they appear all the same, why wouldn’t I pick the one that pays me better, especially if they’re are all priced the same? That’s just good business. 

Unfortunately for sellers, this doesn’t seem to bring them a higher price, it just gets you more showings and helps to sell your home faster. From all the home sales I analyzed to prepare my information for Steve, I noticed that of the homes that had higher commissions sold slightly faster than homes that didn’t.  It’s not obvious when looking at homes offering co-ops slightly higher than the average because often that money is being offered to get brokers to overlook the obvious problems with the home and bring someone by.  While it might not have been as clear in the ‘slightly more’ group that higher commissions bring faster sales, it definately becomes clear in the ‘slightly less’ group.  When you offer less than the average commission, there is a marked difference in time on market.

I took a look at this and noticed that time on market goes up immediately when offering even slightly less than the average co-op.  Days on market increased by 12% when agents offered less than the average co-op.  This can affect the sale price since a long time on the market is viewed poorly.  

When should you offer less than the average co-op?  I did find situations where offering a below average commission didn’t hurt your time on market.  It was usually when the properties perceived value was easy to see.  Low priced homes in high interest areas, and other properties that were obviously priced low in order to bring a quick sale.  The seller and listing agent knew that the number of showings would not be necessary since the price & value of the property would sell it quickly.  

When should you offer a higher than average co-op?

1. Too much competition – The home has a lot of competition of equal value. Set your home apart somehow. Preferably with some upgrades to the home. If you can’t do that, attempt to influence the people who set up the showings.
2. Complications – The process of buying the home will be more complicated than a normal purchase. Typical when dealing with banks and corporations.
3. New construction – A bit of both of the above. Some builders have taken to offering ridiculous commissions to buyer’s agents. Personally, new homes sell themselves because they’re new. Unfortunately, new homes are often not worth the asking price. Any agent that isn’t pointing out this truth is not working in his client’s best interest. Not only does he not deserve his commission, he doesn’t deserve to have a real estate license.

Remember though, regardless of what you offer the buyer’s agent, in most cases it won’t affect the price you get for your home. If you overprice your home, you won’t sell it.  Agents don’t sell homes, the home sells itself. If a buyer walks in and doesn’t like it, then it doesn’t sell regardless of what the buyer’s agent might say.  Agents are there for pricing, marketing, negotiations and coordination.  Sales skills are in there somewhere but you should know that no amount of sales skill will manipulate a ‘well educated’ buyer into buying an overpriced property.   

For this reason, I’ve found, their is no reason to offer a higher than average commission if your home is priced appropriately. If a home isn’t worth the price you’re asking, no amount of bribery will help you out. You might get showings but it still isn’t going to sell. Here’s the only times you should consider offering a slightly higher co-op to set your home apart to the buyer’s agent.

Should buyers expect that their agents should give up some of their commission? That’s between you and your agent. In most cases, the amount your agent (the buyer’s agent) is getting paid has been pre-negotiated between the seller and the listing agent. It is independent of your offer in the sense it doesn’t affect the net to seller and thus doesn’t improve the price you get the house at.  On the other hand,  their are situations where you have done most of the agents work and can rightly feel he didn’t earn it.  Whatever the case, if you want to take the money from your buyer’s agent, remember for that to be legal, it has to happen at the closing and show up on the HUD-1. The lender needs to know.

Lenders have limits with how much the buyer can walk from the table with. Most lenders won’t let the seller pay 3% of closing costs and your prepaids in addition to your broker giving you a kick-back from his commission. There are limits for both agent’s commissions and seller concessions that vary for each lender. When it comes to what the seller can walk away with, that depends on the appraisal. All the lender really knows is you’re willing to attempt to pay back what you put on the contract. It’s not the seller’s money, it’s not the buyer’s money (yet), it’s the lender’s money. To claim otherwise is an over simplification of the truth. There can be no money if there is no house. The house has value and thus a trade has to take place. You could argue this “chicken and egg” causality scenario all day long without being any closer to an agreement.

My advice to buyers:

1. Understand how your agent is paid – Negotiating your agent down does not always improve your bottom line or the value of your offer to the seller. If your offer can be improved by decreasing how much your agent makes then this should be discussed. In most cases, this involves more than your agent, it also involves the other agent and the seller reaching a mutual agreement.
2. Agree on how your agent will be paid and get it in writing. Agree on a maximum they can make on the purchase (expect to have to agree on a minimum as well) or you could agree on a flat fee.
3. Discuss with your agent how he will handle any bonuses offered. He should disclose if there is a bonus, especially if it will affect the terms of the offer.
4. Never go directly to the listing agent. I’ve said it before and I’ll say it again. You probably are going to overpay. Most homes are overpriced by as much as 20%.  Who cares if you get the home for 10% less than the list price by negotiating down the seller and then the sellers agent’s commission only to find out you still overpaid? I’m sure you’ve seen the murder suspects try to represent themselves instead of having their own attorney. I’m sure you’ve also heard of people trying to negotiate their own divorce. I’m sure you know how successful these methods are.
5. Do more of the work – There are many tools for buyers to help them find a home for themselves. While its not efficient using sites like Realtor.com or REColorado to find a home, it is possible. Many Agents including myself offer tools to help you as well as a discount to clients that do much of the work themselves.  While these tools may help you do more work for yourself, they also cost money. The agents somewhere along the line will want to be compensated.  If you do find a home yourself, it is possible to still have representation and save money. Call a buyer’s agent and tell them the situation; most would be happy to assist you in exchange for actually working with a real buyer.  Most would give you a significant refund on the price of their services. (Keep in mind 1-3 on this list and my comments on lenders and concessions, they all play a part.)
6. Don’t be that guy – Trying to work your agent over for every last dime can be counter-productive. Stick to what you agreed upon. You’ll get what you pay for. Make sure you understand what to expect from your agent. Since different relationships exist as do different levels of service, get it in writing before moving forward.
7. Educate yourself – Umm..what’s a commission and why talk about this?  Usually, the seller has negotiated a commission with the listing agent that he earns if he sells the home.  The listing agent turns around and offers to split this commission with a buyer’s agent if they find a buyer.  This widens the net quite a bit and has given rise to the popular MLS systems around the country.  Thus the co-op has come to mean what is being offered to other agents to bring a buyer.  80% of homes listed on the MLS in Denver sell with the buyer having their own agent.  There are no set commissions but there are definately averages that have become acceptable compensation for the work and risk that goes into the business.  These accepted ‘standards’ that used to be quite stable and in line with the cost of living have varied greatly in the recent past as more agents and home buyers have taken advantage of the internet to make life easier.  In addition, the housing boom has increased the value of a percentage based commission faster than the cost of living standards than most career choices.  Because of these factors, many different real estate companies are ahead of the learning curve when it comes to the rest of the National Association of Realtors and have been able to offer savings to their clients both when buying and selling a home.

Other Posts about home buying and commission:

• Money Magazine – Bad Advice for buyers
• How to sell your home quickly for top dollar
• Buying a home? Think before making your first offer
• Most Denver Homes are Over Priced

Technorati Tags: Denver, Real_Estate, Stephen_Gandel, Money, Commissions, Realtors, Buying, Selling, Home

Here’s essentially how they work with stocks.

On the lower part of the image is an example of a slow stochastic. A buy signal is interpreted when the %k (green line) crosses up over the %d (white line). This is most important when value is crossing up from 30. A sell signal is the opposite. When %k is crossing down over %d from 75 (numbers on left). Go ahead and ignore the right numbers and red line for now. Essentially stochastics are trailing indicators of price trends. Trading decisions should never be made entirely from an indicator. It’s just an illustration of a trend over a time period. Depending on the time period you’re looking at, long-term and short-term trends can be identified.

Now, that being said. Here’s a slow stochastic showing short term (seasonal) market trends for the Denver Real Estate Market.

The stochastic demonstrates the change in price trends

, I smoothed the d by averaging 3 months of k. K represents a 3 month period. The price change may be subtle but savings of around 10k could be possible over the same house in the middle of summer. The change in color highlights where the trends change. You’ll notice that July of 2005 to February of 2006 was the longest down trend in recent history while November of 2006 was an earlier change trend change than usual. You’ll notice that the number of homes that sells varies greatly with the season. Periods of increased demand similar to 2004, demonstrate higher levels of homes sold in the spring and fall. Markets also vary greatly even within a city so it would be interesting to see how this worked in specific subdivisions. I’m also going to look into whether income properties differ from the residential home listings shown.

Feel free to contact me if you have any questions.

Technorati Tags: Denver, Real, Estate, Market, Timing, Stochastic, Price, Home, Value

1. ‘Take ten’ – minutes each morning to pet my wife’s cats, sip my coffee, watch the sun come up (I’m never up that early)…whatever I want before I start working.
2. Chew my food – My wife says I eat too fast. It comes from growing up in a large family. Seven people at the table, six servings of dessert. (And I love dessert.)
3. Don’t go to work - I know what you’re thinking, it’s the whole ‘if you’re doing what you love’ thing, but that’s not it at all. I sat in various offices with those flickering fluorescent lights for the last ten years. Be in at 8:30, half-hour lunch, “We need this done by Monday but we can’t afford the overtime right now.” NO MORE! ….oh and maybe just a touch of “if your love what you’re doing….”
4. Pollute the Blogmos - Read something good everyday and write at least one mediocre post every other day.
5. Fend off Alzheimer’s – They say learning a language helps. I recently purchased Pimsleur’s French course before a trip to St. Barths. I’ve only been through 3 of the 48 CDs. I figure a feeling of self achievement will help with lots of other areas of life, including real estate. Real estate isn’t that complicated; I feel like my brain is beginning to atrophy.
6. Update my image – Maybe it’s time to get some of those cheesy broker photos done. While I’m at it, I should improve my website and consolidate some of the tools I’m currently paying for into one place I could be proud of.
7. !Warning – Shameless self-promotion follows! No really, everything for me next year will be about self-promotion. I’d like to double my sphere of influence and my client base.
8. Make a Living – How about some Cash Flow – The one downfall with real estate is that to succeed, you’re going to have spend a lot of money. I spent more money on advertising this year than I made in half of 2005. You always know you’re two months away from being broke. I’m looking to find a way to create a more steady income this year with steady advertising and perhaps some ancillary businesses.

The theme for this year would be to find balance between the different facets of my life in order to operate at a peak level all year. We’ll see how it goes.

Technorati Tags: BiggerPockets, goals

People love the anonymity of the Internet. They don’t want to be sold. They just want something that you’ve got. They hate to leave their information, so they will not, if they can avoid it.

‘They’re not that into you’

Unfortunately for agents, real estate is rarely an impulse purchase.A person will spend a few months thinking about it before they even make a move to contact a broker. It’s far more likely to believe they already have someone in mind to use. Someone they know personally. They could easily know a friend who had mentioned someone they had worked with on the purchase of their own home. Perhaps they already have a family member who is in the business. They may just want to try to FSBO the property or work with a seller directly. Maybe they want to use the agent who’s selling their neighbor’s house. Whatever the case, everyone has a website and it’s unlikely your website sets you apart from the crowd.

It’s really about the initial contact. Where did my clients come from? I mean, there is a difference between someone hearing of your company because of your strong presence in the area, then ending up at your website, and them showing up at your website after an Internet search. Your website is a much stronger tool when it’s a landing place for interest generated by the buzz you’re creating in the neighborhood. But as far as an proactive business tool, it comes up a little weak. Relying on the Internet alone is imagining that if your client had a rolodex full of thousands of business cards, yours would somehow be pulled out consistently enough for you to make a living. Even if you’re in the front of the great Google Rolodex, that doesn’t guarantee you’re going to get more business.

How do I know?…well, I look up all the agents with top 10 listings in Google for the main keywords for Denver. I then see how much business they do. Its usually pretty average and sometimes even below average. When I look up the top producing agents, though, it’s quite common that they might not have a top website. They have no top 10 listings on Google and very little web traffic.

A website isn’t the key to an agent’s success.

Most agents will admit that there is little in the way of a positioning statement on their website. It’s likely there is nothing in the way of price mentioned there, so there is usually very little in the way of a benefit to a client mentioned there. Oh I know we all have the usuall rhetoric about how we are experts in some area, we can get top dollar and are masters of the universe. But there really isn’t that much that makes what one agent does different than the next one. People know this. To be successful, you need to sell benefits. Selling 101, right? What is the benefit to your client? Personally, I prefer, ‘I’ll save you more money’ or ‘I’ll make you more money’ as opposed to ‘I work for the largest company in Colorado’ or ‘Here’s my…

If agents want to be successful, they need to be realistic about where their leads come from and how can they get in front of more people for the least amount of money. While a website is an important tool to relay information, it will never replace the value of a face-to-face visit. The money that you could blow trying to generate leads from the Internet is phenomenal.

So, I’m sure you’re asking, why do I have a website? I still see a website as a key component of my business, but I doubt it will ever be the storefront I had hoped. It’s destined to be a card in a Rolodex. Who knows, I might get a few people that show up organically from the sea of Internet users out there looking to transact some real estate in the Denver area. Far more likely though, they may see my yard sign, postcard, door hanger, newspaper ad, my first time buyer seminar or have a friend drop my name and wonder who I am. By the time they reach my website, they’re already on their second contact. If it looks good at that point, and they’re ready, I might just get a call. But I’m not going to wait for it or rely on it.

I will try to spiff it up a little this year though; it looks pretty bad. One day, people may change. Maybe one day having a top ten listing on Yahoo or Google will be just like having a brick-n-mortar location right next to the supermarket. Just in case, I’ll keep trying to improve the website. Besides, I want to be part of the top 10 crowd on Google simply because I like to win.

Technorati Tags: Denver, Real, Estate, Marketing, Budget, Internet, Advertising

If I knew he was actually going to read it, I probably wouldn’t have sent it off at 3 A.M so unedited. Oh well. He mentioned when he confronted the other agent about the corrections, the agent mentioned he was misunderstood and actually he had had a client (singular) that got that much below asking price. It just wasn’t recorded in the MLS. hmmm….

Realtors are all so secretive and protective with their information, it makes it difficult for the media to get the truth. The public can smell it when they’re being fed a line. The media knows it too, that’s why they’re all over the industry propelling this belief that Realtors take money from homeowners that they don’t deserve. It’s just really difficult to get correct information about what’s going on. A little more transparency when it comes to how Realtors are paid couldn’t hurt, could it? I have found that dispelling misconceptions about this is a never-ending task. Perhaps by being more open, the public understanding of the business will expand from ‘you’re just a salesperson’ to ‘you’re running a business’. The truth is all the information about how agents are paid is easy to get to; just ask a successful agent. It’s the starving ones that will be afraid to tell you what they’re making on the sale for fear of scaring you off.

Personally, I feel that since Realtors put the information into the database and have created their own network, they have the right to dictate who has access to the MLS. (of course I’m a Realtor and a little biased since I want people to use me) I think that controlling a large data base of home prices can be balanced out with having a central MLS public site much like we have in Denver (REColorado.com) where the public can have access to information regarding everything that is for sale. Sales data on the other hand, is public record and anyone who wants to, can collect it down at the county recording office like the title companies do.

In addition, here in Colorado you’ll find a wide range of options for real estate services to suit just about any budget. You just come to expect that, in most cases, you will get less service as you pay less money. But at least you have choices. If the public has choices, that’s a good start. Now Realtors just need to work on the honesty and trust part.

For an upcoming article in Money that will likely be discussing the topic of the day, saving money buying and selling your home, I provided some answers to a few questions regarding the range of buyer’s agent co-ops and bonuses being offered to bring a buyer here in Denver. With all the misquoting going on these days I hope it comes thru clearly. If not, you can be sure that I’ll be talking about it.

Did you know that according to a nationwide survey by Harris Interactive, you are more likely to trust your mechanic than your real esate agent?  The study revealed that 20% of people wouldn’t trust a real estate agent at all.  Only 7% of people would trust a real estate agent to be truthful enough to give them the advice that is best for them.   The only profession more maligned were stockbrokers.

Wow right?  Well, actually, I’m sure you’re not that surprised.  

There are many successful agents out there who have built their business around trust and honesty with their clients. I know there are agents out there that provide a high level of service to their clients at reasonable prices.  So why do the majority of people feel real estate agents are not honest and don’t provide a high level of service considering the commissions they make. Are realtors just getting a bad rap? 

If I was to oversimplify my personal list of little things agents could do everyday to overcome that reputation, it would read as follows:

• Answer your phone. Answer your phone. Answer your phone.
• Know what you’re talking about.  If you don’t know, be honest about it.  Educate yourself before you give an answer.
• Don’t pressure your clients to accept any deal.  Inform them of the situation so they can make an educated choice. 
• Don’t be the tough agent at closing, be the tough agent before closing.  Make sure closings go smoothly and on time.  You have very little leverage at the closing table but you have all sorts of wiggle room beforehand.  Don’t waste it.  You look like an idiot trying to save your client $100 at the closing table when you let thousands go free before the inspection deadline passed.
• Don’t offer legal advice when you don’t know what you’re talking about.
• Know exactly what constitutes loan fraud.
• Disclose up front if you have a personal interest in the property.

Anyone have anything to add?

 

“I love Zillow.”  “I liked them before they were big.”   

Saying that I was a big fan of Zillow.com from the start is kind of like saying, “I liked Dave Matthews before he got big” (My wife, a Virginia native, loves to say that).  For one, nobody believes you, and second, nobody cares.  Regardless of what people would think of me, I’ll say it. I love Zillow, specifically, the Zestimate™.   If you haven’t been following along, Zillow has come of age. I personally like to go on the record with my likes and dislikes ahead of time. I keep a record whether I’m right or wrong. I feel that there are a couple of components missing that will have to be incorporated quickly if Zillow wants to become a fixture in real estate. One of them is probably the most important.   It’s built off an assumption.  

Assumption – People are inherently lazy. If someone doesn’t have to do something, they won’t.  If it doesn’t look easy, they will put it off for later (and probably never do it!). Bottom line – people will choose the path of least resistance. I know this doesn’t apply to the hard working bloggers out there or my clients that are reading this but it’s true of the majority of people. 

1.      Brokers/Agents don’t want to spend all their time uploading their listings to Zillow.

2.      People want to see everything that is for sale and don’t want to go all over the place to find it.

Solution –   Make it easy.Easy for Brokers – Until Zillow can automatically pull in the IDX data or data that is being posted on websites (My Ihouse website automatically feeds Yahoo, Oogle, and Trulia with a click of a button, but I hate the website designs), Zillow will never gain even 50% of listings out there because, in my opinion, most brokers/agents are lazy (no offense).  Also, most agents are not web-savvy. (I’ve read the average age of a real estate agent is in their 50’s, does this say web-savvy to you?) They don’t want to be entering their listings over and over again for each site, they want easy.  Easy for People (especially buyers) –  People (The mob) is even worse.  If you’re a FSBO listen up!  When I get a listing, it gets posted all over the internet.  It’s on the local MLS, the local MLS public page, Realtor.com, Yahoo.com, and every other site that draws from the IDX.  I also post them on craigslist, my website, and some homes even get their own website but where do you think the actual phone calls and emails come from? Most don’t come from the internet, at least not yet.  It’s a given that a broker will sell a listing if he lists it at the right price on the MLS.  He could get slightly more for the place if he expertly markets the home property to play up its high points.  The majority of  buyers in my view, a little better than 75% of home sales in Denver, come from cooperating with another local agent and the rest come from leads to the listing agent.  This means to me that buyers wander around the internet until they’re sucked into the net of marketing put out by good agents.  When someone looks at the MLS, they believe they are seeing everything for sale.  Because of this, people either make the move to purchase or wait because there was nothing they wanted to buy. They saw it all.  It’s all on the MLS.  Therefore, if Zillow wants to compete, it needs to feel like it covers everything. Agents want their listings posted on Zillow.  As long as Zillow is not branded by another company, brokers will want it done.  For Zillow to be a long term success buyers need to have the feeling that looking at homes on Zillow saves time.  If it’s good for buyers, it’s good for brokers.  Make it easier for them because people don’t need Zillow to buy a home right now.    Buyers will come because they don’t want to feel like they’re being ripped off and they want to compare the Zestimate™ with the list price. Though, I’m sure some come to see the cool bird’s eye views of the home, most people want something more tangible.  (I can’t see my house.  I was disappointed.)  As long as there are some buyers on Zillow, I will post all my listings there but I don’t think most agents will go thru the trouble.  So I think this is priority number one for Zillow, making it easier to get the listings up and running.  Zillow hasn’t made any wrong moves yet so I’m sure there is a whole team of people working on it.

And for anyone who still hasn’t heard about the most interesting thing to happen this year in internet real estate, please see my previous post, the ZillowBlog or follow this link to DrewMeyers extensive list of responses. 

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