Drew from ZillowBlog has tagged me with a meme that’s making the blog rounds. Essentially, you have to divulge five things most people don’t know about you. Here goes:
- I’m the first and only person from either my mother’s or father’s family who has earned a bachelor’s degree.
- I have had some interesting jobs! I did a stint in the U.S. Navy and also a stint with the FBI in the 80’s. I was a substitute elementary school teacher for two years in the New York City public school system (while running my own real estate brokerage to supplement that wonderful teacher’s salary).
- During a brief stint as an actor I did a commercial for Snapple, a radio voice-over as a surfer dude for Britches of Georgetown, and played a “stoner” as in extra in Oliver Stone’s movie, The Doors.
- Even my wife doesn’t know this: when she suggested we name our son Cole, I was in total agreement. I love that name. Why? Because I am obsessed with the movie Days of Thunder, in which Tom Cruise’s character is named Cole Trickle.
- Speaking of my wife, she’s a bigwig at Food and Wine magazine, which is a job that comes with unbelievable perks. We go to so many restaurants I can’t even remember them all. I recently saw a list of the thirty best restaurants in Manhattan. I asked Kate why we hadn’t been to more of them. She called me a name and pointed out that we had been to every single one of them. She even remembered what I ate. Thanks to her job, I have played golf with Greg Norman, tennis with Nick Bollettieri… I could go on and on.
Part of the meme deal is that you have to spread the word. I’ll tag Kevin at 3 Oceans Real Estate and Noah at Urban Digs.
Here’s an interesting little passage from Real Estate License Exam for Dummies by John A. Yoegel, PhD, DREI:
"This is the prettiest house on the street." When you, the seller’s agent, say that to a prospective buyer, they realize you’re giving them your opinion. They can also quite easily check it out for themselves. What you’ve just done is puff the property. Puffing is exaggerating the virtues of benefits of a property. It isn’t illegal, and it’s done all the time.
On the other hand, if you say property values are going to go up 10 percent a year for the next few years, you seem to be stating a fact, but the buyer has no way to check it out, because no one can predict the future. As the agent, you’re perceived to be the expert and customers have every reason to believe you. However, if you’re wrong, you could be in trouble. Worse yet is an outright false statement that you know is wrong. "No, sir, there are no plans to extend the six lane road past your house." In the courts, which is where you may end up, your actions in either of these examples can be interpreted as fraud or an intentional misrepresentation to sell the property.
The national avarage pay for a real estate agent is somewhere around $50,000.00. Hardly competitive with the six and seven figure salaries and bonuses paid to those who have taken the time and effort to procure an MBA or some other advanced degree in perhaps marketing or technology.
But it’s still not easy to dismiss Marlow Harris, of Seattle’s 360Digest, who feels like a lot of these Web 2.0 companies are really just attempts by MBAs and the like to take money from the pockets of agents:
There are so many new real estate sites out there now. Some have ties to brokerages, such as Blue Roof and Redfin. Others are disconnected to any actual real estate sales, but serve as portal sites to sell advertising, such as Zillow and Trulia. Others are "skimmer" sites, that try to sell leads to real estate agents, such as HouseValues, Homegain and RealEstate.com.
Most of these new businesses are not started by real estate brokers or anyone actively involved in real estate. Or if they are, the founder/brokers are soon fired, asked to leave or bought out. Most of the founders and CEO’s are business school graduates, software engineers, venture capitalists or have backgrounds in high-tech. They had nothing to do with real estate and chances are don’t now either. They could just as soon be selling widgets as real estate, and the ads or leads they sell could be for cars or computers, just as easily as they are for real estate. Again, it doesn’t matter to them.
Taking a quick look at these companies information, 100% of them were founded by men, and, by looking at their mastheads and "about" pages, most are run by men.
And isn’t it funny that, according to the National Association of Realtors, a majority of residential real estate agents are women.
A lot of these women have entered the workforce after their children are grown. They are people-people, not strategists, not computer programmers, not business school grads. They are attracted to the business for a variety of reasons but if you ask them, a lot will say they like to "help people".
So, I can just see these Real Estate 2.0 guys sitting around a table talking… "We went to Harvard Business School and are only making $XXK a year and these real estate agents just went to some public university or even worse, a community college, and are making just as much as we are! And most of them are the same age as my Mom! Let’s use our superior intellect and design a better website and skim their customers off the top and then sell their clients back to them, for a price!"
Are these business school and IT grads going to schlep around from house to house in the evening and on Saturdays and Sundays, in the rain, perhaps with the Buyers kids in tow, week after week, month after month, searching for a dream home? No. But real estate agents do it, and those business school grads and real estate repackagers and website designers and computer programmers want a cut of the agents labor.
She’s certainly 100% correct that the residential real estate transaction is a very personal one that requires the people skills that many only wish they could possess (witness the masses who enter and leave the buisness within six months… like a revolving door). Aside from the knowledge, experience, and negotiating abilities, to name a few, gauging personalities, being a good listener, having compassion for a buyer or seller’s best interest, and all the while maintaining a professional, business perspective of the transaction are values that an excellent real estate agent bring to a transaction. There will always be a want and a need for this type of service.
I also have some knowledge about those "Harvard grads" that Marlow alludes to. I don’t think too many people out there have "realtor envy," but I have encountered some very bitter people in my 15 years who resent my success. About a dozen years ago, I was hired by a female (important because Marlow eludes to most or all of these "types" being men) Harvard graduate with the concept of finally bringing a much needed MLS to New York City (we still have none). She had zero real estate experience and viewed real estate as one of many simple commodities to be bought and sold.
I was hired to develop the entire listings database. To make a long story short, a dozen years later, she continues to fight the powers that resist change. I have moved on to develop a more traditional real estate business. Since that time, she has asked me to meet with several of her new employees as a consultant. Each of these employees had the same excitement and hunger in their eyes as I first did to make this project a success. The difference was that I had real estate experience and could see the pitfalls and obstacles from a completely different perspective. I got out and eventually so did they but not until after they spent considerable amounts of time trying to fit a square peg into a round hole.
I guess what I’m saying here is that I agree with Marlow as anyone who reads TrueGotham knows: the real estate profession is not going away. It is indeed changing by leaps and bounds and I happen to think that many of these tech savvy young men and women are bringing some wonderfully useful tools to our industry. This industry can get a lot more effecient with the appropriate use of technology. Those who choose to add these tools to there tool box will enjoy continued success. Those who resist should start considering another profession.
Imagine sitting in a 12-hour traffic jam perhaps because you absolutely won’t fit on the subway that is jammed beyond capacity (many think that’s the case now… it’s not!) only to arrive home to your dark apartment or house… yep… another blackout. Sounds fun? These are just some of the scenarios Mayor Michael Bloomberg and his staff are expecting by the year 2030 if we don’t continue a major overhaul of the city’s transportation and utility systems, while increasing our ability to handle the city’s massive pollution.
Plans to reduce polluted emmissions by 30%, cleaning up all of the cities brownfields, and building bigger and better transportation systems are all on the mayor’s long-term agenda. He’s not alone. London has already begun implementation of a similar plan and major metropolitan areas across the country and around the globe are going to have to act now to avoid an unpleasant future. No big surprise here but it seems that the discussions are finally progressing more towards action.
My favorite item discussed yessterday at this event was the inplementation of "Congestion Pricing." I absolutely love this concept of charging a toll to all of those who wish to enter midtown in cars and trucks. The mayor seems to think that Albany wouldn’t be likely to pass such a toll, but I think they are seriously going to have to consider this somewhere down the line. I believe that it would both increase the number of people using car pools and public transportation and simultaneously increase the amount of money that the city would have to allocate towards improvements.
In 2030, my son will be 29 years old and my daughter 26. I sincerely hope that they can enjoy New York City as well as the other major metroploitan cities in the world as they remain the ecclectic, cultural, diverse and intellectually stimulating places that they are today. For this to become reality, a system overhaul is inevitable.
Being fairly new to the blogosphere, I am just beginning to fully realize the power of the blog and the incredible quality of real estate information and insight now available online if you’re willing to do some poking around. There are some incredibly intelligent real estate professionals out there in the "blog trenches," working diligently to alter the perception of the real estate profession.
One such blogger, and a true real estate pro that I have had the fortune of discovering online is Kevin Boer at 3 Oceans Real Estate.
Just take a look at his recent post about the unveiling of Zillow’s new release. (And a follow-up post.) Kevin does a fantastic job of gauging how he believes the real estate agent, the consumer, and the savvy Web 2.0 agent will react to this new Zillow. His insight into the typical agent’s reaction is as honest as it gets as most of those in our industry are so incredibly resistant to change that they will fight it tooth and nail. He also effectively points out how the real estate profession as a whole isn’t aligned with the consumer in their perception of the new Zillow. And lastly, he does a brilliant job of showing precisely how exciting Zillow and similar companies like Trulia are for our industry and the way we do business. Not to sound corny, but consider the power of his insight: I have never met Kevin Boer, nor have I even exchanged e-mails with him, but I have read enough to know that if I were buying a home in Greater San Francisco area, he’d be my first call. I’m sure there are plenty others who feel the same way.
Freshly launched at Active Rain.
You really should be reading his blog The Matrix.
His post on the hidden truth of home prices speaks volumes about the real estate industry on both a national and local level. Jonathan effectively points out in this post all of the flaws in the various reportings of numbers across the industry. Furthermore, he shows specifically how each group’s interest plays a part in their respective reports. This is no surprise as all industries use statistics to portray the story they want you to hear. I can’t help but put another plug in here for transparency of information as this would move us much closer to more accurate and meaningful reports that would become useful tools making important decisions about real estate. Multiple reports using multiple and different data sets are doing nothing for the market but confusing everyone… including me!
In addition to the variety of market reports, Jonathan also points out that the media sometimes interprets the data incorrectly as they did in this instance. It’s nice to see that Jonathan caught this and that both his report and the REBNY report showed an increase in median sales from same quarter last year. But, and this is a huge BUT, the discrepancy is still 6%… that’s almost a 100% difference in numbers. I’m frustrated!
Some very exciting things are happening at Zillow. For those of you who read TrueGotham regularly, you know that I have given the team at Zillow both praise and criticism in the past. Today, more praise as they continue to improve their site and progress toward a more efficient and complete information portal that will also serve to improve the tools (like the Zestimator which I have criticized) that the site provides as well.
In addition to opening up the site for agents and owners to post property listings including descriptions and photos for free, they are also providing a new tool for the seller who simply wants to "test the market" by allowing them to set a "Make Me Move (MMM)" price that would motivate someone to move from their home only if they could sell for a specific price. This is a beautiful (and efficient) way of distinguishing the motivated sellers from those who aren’t so, and it still gives buyers and sellers more options and transparency in a currently inefficient marketplace. I’m becoming a believer in Zillow as they work toward fine tuning their products and cooperating with both the public and the real estate community to open the flood gates on information. I remain skeptical about the cooperation that they will receive from the real estate community as many don’t want to see this
type of information made public. That said, I happen to believe that future government regulations regarding disclosure of information to the public are going to favor Zillow.
Again, for the agents out there who think this won’t work, I suggest re-thinking the way in which you do business because the day is coming where most property information is going to be available in a public forum. Interpreting and navigating this information is going to be the primary task of the new generation of real estate professionals. Of course many already provide this service, but for those who rely solely on providing information to their buyers and/or sellers, the game is changing… and fast!
UPDATE: In playing with this more, I just uploaded a listing with photos, etc. In general the process was impressively user-friendly. But an error message prevented the listing from actually going public. And, much more importantly, the zestimate and comporable properties were so unbelievably innaccurate as to be entirely useless. (A $2 million three bedroom came up at a fraction of the size and cost.) So, while I think this is a great idea, there are clearly still some kinks to work out, at least in New York.
UPDATE: I got in touch with Zillow about the problems, and they have been super-responsive. Should be fixed soon.
I have spent a lot of time thinking about The Great Open Listing Portal Debate that was cranked up a notch recently by the Real Estate Board of New York’s efforts to make member firms’ listings public.
As anyone who reads True Gotham knows, I am a proponent of making every listing (not just REBNY member firms) public.
That said, I have recently been thinking about my higher-end clients in the luxury marketplace who may not be as enthusiastic. I’m sure most of my clients, colleagues, and friends in that ultra-luxury marketplace would agree to have their property exposed to the general public, but certainly some would not. Some may not want colleagues, neighbors, or indeed strangers to know that they are moving. Others may have priceless furniture, artwork, or personal heirlooms whose photos they wouldn’t want in a public forum. Some may simply prefer to only have their property “shopped” to those who can afford it. (Why list your $25M home on a public portal when most $25M buyers are not looking on that portal?)
The ultra-luxury buyer is almost exclusively represented by a sophisticated real estate agent who is familiar with the types of properties that their buyer is seeking. Furthermore, the agent representing the seller is equally familiar with these types of properties and those who would be qualified to purchase them, particularly if they are looking at co-ops.
So as much as I may want to see a database of ALL properties made available to the public, the reality of this happening in a city like Manhattan is much less likely than I originally thought. Some percentage of owners will certainly resist. Probably not nearly enough to affect the overall efficacy of an open listings service–a quick check of current Manhattan listings reveals 6.2% of Manhattan listings are in the $5 million or more group I suspect would be most reticent. Most likely all that it means is that for those who wish to sell in a more private fashion there will always be a niche market to provide that type of service.
