Archive for April, 2008

Will Realtors be disintermediated by on-line tools? Probably not, but tech-savvy Realtors will supplant those who do not adapt

By: Greg Swann
April 20th, 2008
Category: Beyond Categorization!,Buying and Selling Homes

This is my column for this week from the Arizona Republic (permanent link):

 
Will Realtors be disintermediated by on-line tools? Probably not, but tech-savvy Realtors will supplant those who do not adapt

The big news in real estate is the market, of course. My view is that the American economy is much stronger and more resilient than you might guess from day-to-day reports.

But the other big story in real estate is the idea of “disintermediation” — replacing Realtors with some combination of do-it-yourself effort and hi-tech tools. The stock retort to this notion — and I have made it myself — is that people will never buy homes like they buy books on Amazon.

Perhaps so. But I lived through the desktop revolution in printing, so I have a different take about the dreaded word disintermediation.

If the triumphant yelp is that some travel agents and some stockbrokers still have jobs, I will point out that some blacksmiths still have jobs, too. Horses still need shoes. That much is beside the point.

Here’s my take on the matter: Don’t think in terms of disintermediation. Use the word “supplantation” instead. In industry after industry, old techniques are being supplanted by new ideas. More importantly, the old technicians are being supplanted by new ones.

This is not a necessary consequence, but it often works out that the “old hands” don’t want to make the change to the new ways of doing business. Even if they do, the “first-mover advantage” can be too great to overcome.

The same goes for everything — most especially real estate. Realtors who are not all the way onboard with the way business will be done in the future will be left behind at the station.

A real estate transaction is so complex that most people will continue to want professional advice — even as they handle many of the simpler functions Realtors might have done in the past. The work we do will be superficially similar to the work others have done in the past — but those others won’t be doing it any longer.

Will they have been disintermediated? Not if you insist that they haven’t. But they will have been well and truly supplanted.

When will that happen? Ask a blacksmith — if you can find one.

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Zillow.com’s Mortgage Marketplace brings anonymous apples-to-apples mortgage rate quotes to consumers, free consumer leads to lenders

By: Greg Swann
April 13th, 2008
Category: Buying and Selling Homes

This is my column for this week from the Arizona Republic (permanent link):

 
Zillow.com’s Mortgage Marketplace brings anonymous apples-to-apples mortgage rate quotes to consumers, free consumer leads to lenders

Wouldn’t it be great if you could get a broad array of mortgage quotes without having to make dozens of phone calls? And what if you could make a true apples-to-apples comparison among quotes? Better still, what if you could remain anonymous, making yourself known to the lender only when you are ready to do business?

Seattle-based real estate start-up Zillow.com last week released its long-anticipated mortgage lending product, called the Mortgage Marketplace, and it offers all those features and more.

Unlike Zillow’s “Zestimates,” the loan quotes are generated by real people, working lenders. Zillow will basically be acting as a hands-off intermediary between borrowers and loan originators.

Consumers using Zillow’s new Mortgage Marketplace will be able to anonymously solicit bids for loans from participating lenders. The consumer will fill out a detailed form disclosing all pertinent financial details.

The form will be submitted anonymously to participating lenders, who will, in their turn, produce estimated loan quotes, submitting them, through Zillow, to the consumer. The consumer will then have the choice to make direct contact with particular lenders to decide whom to do business with.

To a very large degree, the information asymmetry between lender and borrower will be done away with, since the loan quote will detail every fee associated with the loan. Moreover, Zillow will be implementing a reputation-management system whereby borrowers will be able to rate lenders on their performance.

In return, the lenders will receive Zillow’s mortgage leads at no cost.

What’s in it for Zillow.com? When you fill out a form requesting a loan quote, Zillow will be writing “cookies” to your local browser. They won’t be storing your financial details on their own servers, but they will be able to access those cookies in the future to target specific ads at you according to your demographic characteristics. Zillow will also be selling access to these cookies to other ad-supported sites.

So, just as with free-TV, in exchange for looking at advertising, you will get free anonymous mortgage quotes and lenders will get free mortgage leads.

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Listing real estate the Bloodhound way: Everything we do to list historic, architecturally-distinctive and luxury homes for sale

By: Greg Swann
April 5th, 2008
Category: Buying and Selling Homes

“We feel that you and Bloodhound Realty did an excellent job and we are extremely happy that you selected us as one of your clients. Your diligence and hard work were both refreshing and somewhat unexpected given our previous experience with ‘traditional’ real estate marketing.” –Ken Green, formerly of 1322 East Vermont Avene, Phoenix, AZ 85014


This is a detailing of the things we do to list a home for sale. We don’t do every one of these things on every home. For example, we know that if we list in a newer tract-home subdivision, much of the noise we try to make will fall on deaf ears. If I am listing a tenant-occupied investor-owned home, we won’t do much beyond the normal MLS, lockbox and sign kind of listing. But this is what we do when we pull out all the stops for those homes that are likely to excite the most attention among buyers.

  1. We know from hard experience that if a home is priced wrong, nothing else we do will make a difference, so the very first thing we do for our listings is price them properly. We will work hard from the MLS system, looking at each comparable home physically to see how it really compares. If we have any doubts about the price we arrive at, we acquire a full appraisal at our expense. We want to make sure we get every dollar that we can actually get for the home. By pricing to the current real estate market, we can get the maximum price in the minimum time.
  2. Setting the stage for staging. Cathleen Collins will go though the house with a fine-tooth comb, often taking many photos. She will make lists of repairs, touch-ups and redecorating she wants to do, and she will plan her staging strategy.
  3. Home-warranty pre-inspection. We put a home warranty on our listings covering the listing period and the buyer’s first year in the home. We use American Home Guardian, and they do a fairly rigorous pre-inspection so that any pre-existing conditions can be addressed.
  4. Repairs, painting and cleaning. This can take anywhere from a few days to more than a week. Everything’s a trade-off, and we can’t always do everything we might wish for, but we want for our homes to be as clean, as homey, as livable and as turn-key as we can possibly make them.
  5. Staging. This is Cathleen, and she is a master at it. We own about three houses worth of furniture, and she is always trawling Craigslist to find more — period, modern, eclectic. She has tons of art and decorator items as well, and her modus vivendi is to take everything she thinks she might need to the house, then move back what she doesn’t use.
  6. Professional photography. We have just switched to Obeo for our virtual tours. They send in a local professional photographer to do hi-resolution and panoramic photos. In addition to forming the basis of the virtual tour, the hi-rez photos are also used for Obeo’s Style Designer, virtual remodeling of selected spaces.
  7. Floorplan measurement. We put an interactive floorplan on the web site for every listing. Buyers can interactively place their furniture, plus there is a printable PDF version that they can pass along to movers or decorators. We use Floor Plans First, but this is a service that Obeo offers, as well.
  8. Amateur photography. That would be by us. We like to have dozens of photographs of everything, including photos of the interior and exterior of the home in all the different colors of light of the day. We can end up taking photos of the home over the course of days, just for the sake of a static kind of verisimilitude. For what it’s worth, I think it is incumbent upon Realtors to do the bulk of their own photography. Use a pro for the print stuff, if you lack confidence, but acquire a camera appropriate for real estate work and learn how to take good real estate photos. You should get in the habit of having a good-enough real estate camera with you every time you leave the office. The language of real estate is photography, after all.
  9. Neighborhood photography. We like to have a fairly comprehensive selection of photos of other homes in the neighborhood. We know that buyers want to know for sure that they’re moving into a neighborhood that fits the home we are selling. We show them many of the nearby homes so they can get a feel for the neighborhood.
  10. Videography. We don’t do this for every listing. We only do it when we have a story to tell, because video without a story is anti-marketing — worse than doing nothing. If the sellers or the neighbors have an interesting story to tell, that can work. Often, just using the neighborhood photos with a voiceover can make an interesting film.
  11. Building business-card-sized Open House invitations. I do this, printing them with OvernightPrints.com. We print these in the thousands.
  12. Building custom yard signs and directionals. This is me again. We print these locally, with a company called Signs By Tomorrow. Why do we put a paragraph of small text on our yard signs? To stop traffic. The purpose of the sign is to sell the house, so we do what we can to make sure people stop and take a look. We also add a “rider” to the sign showing the price of the home in six-inch high numerals. It’s the first question anyone is going to have about the home, so why not answer it in no uncertain terms?
  13. Building the custom web site for the home. Generally, we will acquire the domain for the home before we even go on the listing appointment. Using engenu, I can set up the gross anatomy of the single-property web site, then Cathleen or I can go in and finesse it page-by-page. In addition to many, many folders full of photos, which engenu will render as slide shows, we supplement our web sites with all the additional information we can find or create. For example, if we can lay our hands on historic photos of the home or neighborhood, we will scan them in order to provide that background information. The same goes for historic documents or newspaper articles. We will research the builder, the architectural styles or the construction methods and document those. Lately we’ve been building custom maps in Google Maps to help buyers discover local amenities. We try to have all these ancillary items done before the listing hits the MLS, but that’s not always possible. But we live by the idea that, if it looks done, it is done, so we don’t tell people about features that are still to come. That way, the web site always looks and feels finished, even if we don’t yet have the link for the finished virtual tour, for instance. Our sites are built to permit the easy addition of new or changed content, so we keep working on the site before and after the MLS listing goes live.
  14. Starting now, we are building coffee-table books for distinctive homes. We always have dozens of striking photos of the home, so a coffee table book is just one more way we have of getting those images in front of buyers.
  15. Listing the home in the MLS. By now we will have written a ton of text about this home. We use it all and then some in the MLS. We get 680 characters in the remarks and six photos with 250 characters each for captions. If we miss out on using three of the characters available to us, that’s a lot. We can have an unlimited number of “virtual tours,” which are essentially off-site URLs. We use as many of these as we have content for. One of our working precepts is that the listing may be our only chance to make our case for the home to the buyer, so we try to leave nothing to chance. If we can feed the buyer’s agent a good closing argument, we’ll do that, too.
  16. Compose the flyer. We build a full-color flyer using our best photos and our most rhapsodic text, printing it on heavy coated stock. We use flyer boxes that will hold the flyers but also have a pocket at the top for business cards. We put the Open House invitation cards in there, just in case someone doesn’t want to take a full flyer. We normally put flyer boxes facing in both directions on the post, and we will store extra flyers and Open House cards inside the home.
  17. Set the post, hang the signs and flyer boxes, mount the lockbox. For now we use a normal six-foot 4×4″ white post. When we can afford to have it done, we’re going to switch to a custom-made sign structure, framing off the big sign and the riders and attaching everything will small bungee cords to keep things from flapping around in the wind. We’re always looking for better sign-lighting solutions, too.
  18. Promote the listing with online listing bots. We’re using PostLets for the broadcast distribution, but we do Craigslist our way, by hand, and we will go in and hand-finesse other online listings.
  19. Write a weblog entry promoting the listing and linking back to the single-property web site. This has all kinds of benefits, as we’ve discussed, but here’s one we haven’t talked about: Linking to your single-property web site from a trusted weblog can break you out of the Google sandbox.
  20. Distribute the Open House invitation cards. We will do this with nearby employers and in two sorts of neighborhoods: Move-up areas for our listings, and neighborhoods where BloodhoundRealty.com has a lot of fans. We know that people who like us will try to send us buyers, so we always want to let them know when we have a new house for sale.
  21. We hold Open Houses every week until the home is sold. Why? Because there are an awful lot of un- or under-represented buyers out there, and we want for them to be able to see our home. We avoid dual agency, but we have no problem showing the home to buyers who accidentally left their buyer’s agents at home. If a listing is near the commuter traffic flow — and most of ours are — we like to hold after-work Open Houses, too, just to see if we can snag people sick of driving. We hold Open Houses to sell the house — everything we’re talking about here is about selling the house — but we have met a lot of very interesting people at Open House. Sellers come to check us out, of course, and we meet a few buyers. But we also get to become acquainted with fascinating people who love our houses and know a ton about them. I can’t count how many times we have gained access to historic photos of our listings because someone wanted to see what had become of their old home.
  22. We service our listings. For vacant homes, we want to be in the house every other day, at the outside, ideally every day. For one thing, a home needs regular maintenance, and we can’t see to it if we aren’t seeing the home first hand. But very often we will end up taking new photos of the home, which we then incorporate into the web site.

We never stop thinking of new ways to promote the home. Our future success at selling homes is directly related to our present success at selling homes, but that’s a secondary consideration. The primary goal is simply to sell the home. We are always thinking and talking abut new ways to draw attention to our homes, new ways to make them more appealing to buyers, new ways to get the best results we can attain for our sellers. We’re not shy about talking about the things we do. We’re always delighted when someone picks up on our ideas, but that’s the rare case. But, regardless of what anyone else does, we are always going to be working at getting better at listing and selling homes.

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Looking for a bargain in Phoenix real estate? Add some elbow grease to your money and go for a bank-owned home

By: Greg Swann
April 5th, 2008
Category: Buying and Selling Homes

This is my column for this week from the Arizona Republic (permanent link):

 
Looking for a bargain in Phoenix real estate? Add some elbow grease to your money and go for a bank-owned home

Last week we talked about how home sellers can command a premium price in the current Phoenix real estate market, even if they are competing with nearby foreclosure properties, by putting the home into turn-key condition.

So what’s the counter-strategy? If you’re a buyer looking for the best possible price, what should you do?

Go for the bank-owned homes, of course. Trying to buy a short sale can be heart-rending. The price listed in the MLS will be meaningless. The lender will decide what price to allow. Still worse, lenders drag their feet on short sales. If they have any hope of keeping the loan alive, they won’t let the house go. Meanwhile, your own interest rate could be spiking, rendering you unqualified for the deal if and when it finally comes through.

By contrast, bank-owned homes (you might hear them called REOs, for “real estate owned”) can race through the escrow process. Once a bank has foreclosed on a home, all it wants is to get it off its books and recover whatever cash it can, as quickly as it can. In consequence, your offer might be approved in just a couple of days, with the bank rushing the closing date any way it can.

Because of that, your loan qualification matters a lot. If you look shaky to the bank, it might pick a lower offer from a stronger borrower just to be assured of getting whatever money it can out of the deal.

And then there is the condition of the home. People  losing their homes sometimes let the daily maintenance slide. Expect to see filthy carpets, scuffed-up paint, damaged doors. The air conditioner might have been removed and sold, or the water heater — or even the kitchen sink.

In most cases, the bargain price you get for the home is going to be offset somewhat by the money you will have to put into it. But if you are handy and industrious, the profit on these expenses can be two dollars or more in value for every dollar you spend.

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Is 718 West Moreland Street in Story a Frank B. Wallace original?

By: Greg Swann
April 2nd, 2008
Category: Historic Homes

I was in this home with a buyer on Monday. It made me completely nuts, so, with the permission of the listing agent, Jeff Gary of the Principal Residential Group, I went back in yesterday to make a photographic record of the property the way it is right now.

It’s a short sale, which is always sad. You can see the home in happier days in our catalog of homes in F.Q. Story.

But what struck me about the home were the similarities to homes built around the same time — the early 1930s — by seminal Phoenix home-builder Frank B. Wallace. I believe this home was built by Wallace himself, but, if it wasn’t, it was built by people who were paying close attention to the new ideas he was bringing to the marketplace.

I ended up taking about six dozen photos of the home. I’m showing a few here, but you can find the rest at the web site I built for 718 West Moreland Street.

This is definitely a re-furb candidate. If retains a lot of the original fixtures and hardware, but that means it will need quite a bit of restoration. But if you’re looking for a very Wallace-like home to refurbish, this might be the one.

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