Exit Realty Uncovered








As an advocate for good real estate, I couldn’t help to pass up the opportunity to critique Exit Realty. The company with the CEO that claims you’ll “Get the greatest return in the history of the world!”

I don’t recommend watching their 18 minute video (unless you’re having a hard time falling asleep at night), however its interesting to see the self-absorbed CEO wiggle around what is commonly know as a multi-level marketing scheme and deliver the longest recorded value proposition in Guinness Book history.

No mention of service, no value delivered to the consumer, no contribution to the real estate industry or unique value proposition. Exit Realty on it’s best day is a cheap and unprofessional growth system that is positioned for bad business while walking a fine line of ponzi scheme. Let the quality of their website illustrate the quality of there brand (lack there of) http://www.exitrealty.com/.

In closing, I despise the name “Exit.” This is by far the dumbest name in the real estate business. As a buyer or buyer’s agent I like the name exit because it automatically makes me think desperate, or extremely motivated, or low ball city! I’m not sure why a home seller would even consider a name or brand like this but who am I too judge. Let’s see if they are still around in 10 years, then again, look how good Amway has done…

Bad Blogging 101

Yes, I know you don't have to tell me, I owe you some posts. Sorry, life happens, no excuses.

Anyway, Greg Tracy of BlueRoof peaked some interest with his blog post regarding Zillow completely missing the mark : (http://blueroof.wordpress.com/2007/05/03/zillow-misses-the-mark-completely-in-utah/#comment-8758)

My response: (It was requested, fyi...)

The better question becomes, where does Zillow hit the mark? Texas? Vegas? Bogata? Anywhere Town, USA? Jamaica?

I like Greg’s synopsis of Zillow’s business model and if anything, I feel sorry for them. They’re exactly like a consumer who recently purchased a plasma screen TV thinking that their viewing experience was going to increase drastically, only to find out that after plugging in and turning on, the picture looked more pixilated that then 17 inch lunch box predecessor that’s collecting dust in the garage. Up conversion my friends, up conversion.

If you want plasma viewing holy grail 1080p clarity, you have to have the content that provides it (i.e. HD Cable box, HD DVD player, HD DVD). Zillow’s problem is that they built this killer app to view houses but they’re setup on the equivalent of TV antenna (aka crap feed). This feed will not change because local MLS boards control it and you know what those people think of technology… Fear (insert blinking .swf file here reading “FEAR FEAR FEAR”).

So anyway, that’s a major front for Zillow to tackle, good luck. Getting Rosie O’Donell on the cover of a SI swimsuit issue might be an easier “up conversion” task, but who knows, adobe’s new creative suite sounds pretty good.

Nevertheless I see Zillow’s major issue being the actual advertising model itself. I don’t see this being successful in this business due to language barrier. CPM, ROS, PPC, CPC and all the other dumb internet advertising acronym’s on the frontend, let alone conversion, A/B testing, complicated landing pages backend, is a language that nobody speaks around here. Even the most tech savvy brokerages thinks arbitrage as a process that happens during a divorce proceeding.

At the end of the day we can build all the freeway’s of traffic we want, but until someone (data liberators “zillow, trulia”) figures out that freeways without off ramps are like fat kids without cake, I don’t see any Travelocity-esque success stories.

[Parting shots: Blackberry’s are not meant to write this much text, Google’s acquisition of Double-click is a sign of the times, and I believe that I’m the only REALTOR that has ever attended a techcrunch event]

The 1st Annual Real Estate Carnival - Carnie Awards! As you can tell, I got a little carried away while watching the Grammy Awards and thumbing through this week’s Carnival Posts. I read every word in every posting and I’m happy to present the following Carnie Awards! Enjoy...They’re here, they’re queer and they’re not going shopping without coupons. Queercents took the favorite post of the week featuring aging jocks Roger Staubach and Emmitt Smith and their “post ball career” real estate ambition. The title speaks for itself, “If Move.com Were To Murder HouseValues.com.” The Real Estate Tomato has the best read. If the HouseValues.com shakeup peaks your interest, then you'll want to visit Future of Real Estate Marketing "Raising The Titanic."

Notables:
Under the microscope - Trulia and Realty Thoughts and a similar thread
Realestateconvergence was fired up about domain registration fees and said “there are no secrets or no tricks to know about domains.” Maybe someone should mentioned that a 20 character URL might be a good place to start, but who knows, maybe this is the next trend for real estate 2.0 (i.e. thefurtureofrealestatemarketing). Let's just hope that they don't start charging per character on renewals, giving another acronym for CPC. Nonetheless, the title of their post is “Master of My Domain (Part I)” so I’m really looking forward to the insights in Part II!

(2nd Best Pun)

This Pun is on me. Before writing this blog post I prepared a "re-enter strategy" for a property that I marketed last fall. Minutes later I read this post from Stefan Scholl of Northern Michigan Real Estate, which questions the Ethics in Time on Market, particularly referring to properties that are re-entered as "new listings" on the MLS. Lol. Oops.
“I’ve been less angry when people have pissed on my shoes in public toilets!” Athol Kay at the Real Estate Guide got fired up in this post inspired by Active Rain regarding the generational differences between X, Y and Boomers. Bottom line here, stop building for the 55+ crowd!

The Trust Deeds Boom of 2007 (Opinionated Mortgage) Sub Prime Shunning and a projected trust deed boom in 2007
Leadership vs Followship, Real Estate 2.0 vs Real Estate 1.0 and Zillow vs NAR (WebHomeUsaBlog) The only notable disintermediation mention this week
What would a real estate Carnival be without the discussion of mobile homes? Clarifying the difference between “single-wide, double-wide, and the confusing … modular.” Ohio mobile home’n just got that much easier. Thank you!

1. The “Kissing Booth” was in full operation this week and Redfin’s CEO Glenn Kelman was charming the crowd. You can find the fluff slappy happy write-up on BloodHoundBlog…

2. If it was politically correct to choose a post that I COMPLETELY disagree with, this would be the one… Wisebread’s “Cost of a free ride” will make any real estate professional cringe but give it a chance, they might be onto something. Maybe next’s weeks post will be “the benefits of sharing the same attorney as your soon to be ex-wife in a divorce proceeding!?”

Cheers to all and let's see if they let me write this again!

Mixing business and politics After performing a basic search for “San Francisco Real Estate,” I stumbled across a San Francisco real estate brokerage that has an interesting value proposition. The company is called Blue Real Estate and they’ve positioned themselves as the “Progressive Real Estate Alternative.” They clearly state their liberal political views and from a branding perspective I have to raise a flag.
I’m very supportive of niche verticals and catering to the need of under served markets but the jury is out when mixing business and politics. Let’s face it this is church and state with a private sector twist.

In some places polarizing views are paying off. The old maxim “there is no such thing as bad publicity” has been extremely profitable for the Dixie Chicks and their anti-Bush stance. Some still despise them, but their concerts are sold out and they can be found on more magazine covers than ever before. My guess is that they wouldn’t be receiving so much publicity if it weren’t for their political stance.

As I see it, the polarizing of politics in real estate is a major branding mistake. If there was a city for this to work, San Francisco would be it. But the problem I see is that a home seller working with Blue Real Estate would limit their audience by discouraging a conservative (Red) buyer.

For example, about 30 per cent of Americans are going to love Bill Clinton no matter what, and about 30 per cent are going to discard everything he says, no matter what. The same goes for President Bush. And while a Pro-Bush person can’t figure out for the life of him why someone else is Anti-Bush, the reverse is also true.

The problem with bringing politics into real estate is that it creates strong feelings in 60 per cent of your customers: 30 per cent will strongly agree with you; 30 per cent will strongly disagree. Blue Real Estate is trying to reach the 40 per cent in the middle. But what is the cost, and is worth agitating 30 per cent of your customers?

A Blue Real Estate home seller will limit their audience of potential home buyers.

A Blue Real Estate agent will limit their potential listings and clients to serve.

The real estate transaction is already ranked as one of the most stressful things a person will do in their lifetime. Why make it more difficult? Why bring politics into it?

Tell us your thoughts and comment below

No crystal ball needed, Trulia rolls out the goods

If you're interested in real estate, Trulia (the real estate search company) just went to bat for you. Today, Trulia rolled out with two additions that make real estate search not only colorful but effective.

1. The national heat map will allow you to understand real estate trends at a hyper local level. County, ZIP and even nationally, this tool rocks. Basically, if you can make out the difference between skittles, you can pick what neighborhood is right for you.
2. The Trulia Trends report. The heat map tells you the currentconditionn of the market and the Trulia Trends report will tell you the direction its headed! Bingo! No real estate report, company or crystal ball hasdepictedd it like this...

01.09.2007

The New Year, Real Estate and Home Equity Lines of Credit

There's a scary scenario making the rounds these days that goes something like this: The boom in house prices over the first half of this decade created trillions in real estate wealth, which Americans feverishly tapped out to buy cars, big-screen TV's and other goods and services. But now that the housing bust has arrived, this scenario posits, falling prices will throw everything into reverse, causing a consumer retrenchment with adverse implications for the economy at large. While the basic story line has merit, it nonetheless exaggerates the risk, for a variety of reasons.

First, house prices have not fallen. While there have been occasional reports to that effect from the National Association of Realtors and the U.S. Commerce Department, each of these sources cite "median sales prices" which historically have overstated both price appreciation and decline. Now, for example, housing is relatively unaffordable, which causes there to be proportionately more sales of lower priced homes, which biases median sales price measures downward. A more accurate measure of price appreciation, from the Office of Federal Housing Enterprise Oversight, shows third quarter house prices up 6 percent from one year ago, though slowing to just a 1.5 percent rate during the quarter. Prices may well decline going forward,
but at this point declines are isolated, not generalized.

Second, while it is true that equity extractions from the real estate market have been huge in recent years, these extractions have not translated directly into consumer spending. According to the benchmark resource on this topic, Greenspan and Kennedy at the Federal Reserve, active
withdrawals from the housing market (via cash-out refinances or home equity borrowing) amounted to a staggering $1.4 trillion over the past three years alone. However, according to a Fed survey of cash-out refinancings during 2001 and 2002, 47 percent of these withdrawn funds were merely reallocated to other purposes, such as securities investments or paying down
other (generally more expensive) debts. Other uses included paying taxes (2 percent) and home improvements (35 percent). Only 16 percent went toward conventional consumer spending.

A third caveat is that, in spite of these huge equity withdrawals, real estate wealth is still at record levels. As of the third quarter there was $104,000 in real estate equity for every household in America, up from $102,000 one year ago and $89,000 three years ago (controlling for inflation). This means there is plenty of equity left for tapping, should we choose to do so.
Fourth, thanks to technological advances and intense competition in the mortgage market, Americans will probably do exactly that. Mortgage transaction costs (e.g. points and fees) have fallen 75 percent over the past 20 years while the variety of mortgage products has expanded vastly. As a result, borrowers refinance more often and manage their debt more aggressively than used to be the case.

Of course, things would be even better if house prices were still climbing at a double-digit pace. But the end of a boom need not be followed by a boom of an end. (12/19/06)

Compliments, from Bobbi Clemens and National City

Realty Subjectivity

In a recent blog post, Redfin asks, “Are TLC’s fixers?” Our answer:

Is a house a home?
Tomãto Tomäto?
If a tree falls in the woods…

There is no definite answer, but after looking at the property image, you can clearly see the obvious…

Needed:

Laminate Pergo Flooring $600
9 Light, 2 tier chandelier $148
Doing something with those drapes $100 (IKEA)

Spending money on the things that matter most, priceless.

Why remodel a kitchen when you have disgusting finishes hanging from the ceiling and walls? That’s like polishing the wheels when you have no transmission. Adding value to real estate, aka flipping, is all about adding value where it matters most. Note to flippers, Lighting is the most inexpensive improvement that can make the biggest impact.

Winter Listings – Price it right!
I hate the commonly misunderstood stereotype that winter is a bad time to sell. I think that is a bull$#!%. If you’re thinking of listing your property in the spring, why not list now? Any buyer that is looking during the winter and holiday season is a serious buyer.
Plus, your property won’t be lost in the hundreds of listings that come on the market in early spring.

Price it right, hire a markeing powerhouse to get the most traffic to your property and be realistic about selling.

12.28.06

Liposuction Needed
As home values falter, home buyers ponder and magnifying glasses focus on identifying the liposuction need in the once booming real estate industry, a very fat and thriving parasite is about to be put on the hot seat – Title Insurance. It’s a racket with protective legislation and insane margins.

A search of online records now costs only $25, and only $74 of each policy goes to pay claims, leaving “a $1,373 spread for overhead and for profit” on the average $1,472 policy.

We have to ask ourselves, Do we need title insurance? Well, your bank is going to take out a policy, at least for the amount of your loan. Most of the time, buyers end up getting their own policy, to fully cover their investments. Your attorney will strongly suggest you do so.

Title insurance is “an outdated product that should have been all but wiped out by digital technology,” Scott Woolley opines in a diatribe on the industry that runs nearly 3,000 words in the latest Forbes. From its title — “Inside America’s Richest Insurance Racket” — to its rhetoric, the story doesn’t cut the industry an inch of slack. The big three title insurers, First American, Fidelity National and Land America are “fat and thriving.” Woolley says, and “creaky old laws” have enriched the industry for decades, “and bilked home buyers out of billions of dollars.”

Source: Forbes mounts high horse, takes on title insurance industry - Scott Woolley, Forbes, by way of Matt Carter, Inman News

11.01.2006