The following data was taken straight out of the Baron database. It compares the average time a home spends on the market (reported by our agents) versus the average final bid of listing auctions:
| Time Period | Avg Time on Market | Avg Lead Bid |
|---|---|---|
| Before 1/1/2007 | 72 days | 4.46% |
| Since 1/1/2007 | 111 days | 5.27% |
It’s quite simple when you think about it: the longer a home sits on the market, the more costs a Realtor incurs.
I’ve got a fantastic idea for a new Realtor product. I’ve never been more excited about the prospect for a new product than this one. If my assumptions are correct, this new product could dramatically change the way Realtors do business. However, my assumptions are just that…assumptions. So, if you are a real estate broker or agent, please consider helping me validate those assumptions by completing the following survey. It only has 7 questions and will likely take you less than 2 minutes to complete:
http://www.surveymonkey.com/s
If you’re a blogger whose audience includes brokers and agents, please consider linking to the survey. Be sure to leave a trackback in the comments if you’d like to preview the new product once the design is complete.
Thanks in advance for your participation!
It’s not uncommon for visitors to arrive at RealtyBaron.com after asking a search engine, “Are real estate fees negotiable?”. Notice the query is not “how” to negotiate, but rather “if” negotiation of a Realtor’s price is allowed.
That very question coupled with Redfin’s appearance on 60 Minutes has me thinking about upcoming listing appointments this summer. With 13 million viewers, 60 Minutes may have awakened the U.S. consumer—many who had previously assumed real estate fees where non-negotiable—and inspired them to bargin with Realtors while huddled around a listing presentation.
Consumers motivated to haggle (i.e. downward pressure on Realtor fees) combined with a weakening real estate market that requires more time and money from Realtors to market listings (i.e. upward pressure on Realtor fees) makes for a very, very long summer for Realtors.
“The average agent processes eight deals a year. We have an agent that can do that every week,” Kelman explains.
“Are you spinning me?” Stahl asks.
“I mean, seriously,” Kelman replies.
I reviewed the segment again this morning. I believe the key word Glenn used was “can”…. as in Redfin has an agent who can close eight deals per week if market conditions allow. If Redfin did have an agent who was closing eight deals per week, it seems Glenn would have said, “We have an agent who is doing that every week”. However, the impression of eight deals per week is certainly made. But it’s like a coach saying “we have a running back who can rush for 100 yards per game each week”. They’re both statements that speak of potential. In my opinion, Glenn was speaking to Redfin’s technological and organizational advantage over the average “traditional” agent rather than current performance.
Furthermore, “I mean, seriously” doesn’t seem like a confident response to the question, “Are you spinning me?”. I would expect “No”, “Absolutely Not”, or “Not spinning at all”.
In any event, I invite Redfin’s super-agent to publish his or her MyAgentRankâ„¢ badge on a website or weblog and allow their sales data to be vetted by the public.
In a matter of hours today, I lost $10 to Zillow with nothing to show for it. I used the same ad copy that costs me $1.27 per conversion on Google. I guess visitors were too busy asking about the paint job on Joe’s house to glance at the ads. My dismal results below:
UPDATE: Zillow’s David G. emailed last night. His comments:
Your ad should not have served that rapidly. We’re working on it and I’ll get back to you with an update and a solution as soon as we figure out what’s up.
David
Way back in 2004, I launched a free ad generator to help homeowners publish their FSBO listing to Craigslist. The press release read “add color, stylish formatting, and unlimited image hosting for real estate ads on Craigslist.” As it turned out, the tool was used almost exclusively by real estate agents. Unfortunately, I yanked it from the site in late 2005 when RealtyBaron.com underwent a major re-design.
Since then, RealtyBaron’s mission has become clear: “help affiliated real estate agents get to the closing table as much and as quickly as possible”. In other words, if an agent is signed up with RealtyBaron, I want to help that agent close as many deals as possible because it only strengthens our platform to have closers associated with us.
As a result of this mission clarity, I re-launched the ad generator yesterday. Like the old version, the new ad generator automagically provides “color, stylish formatting, and unlimited image hosting”. The new version, however, does not require the agent to copy/paste any code. In other words, the tool allows for seamless ad creation and publishing to Craigslist. Other online classified sites such as Backpage and LiveDeal are in the pipeline.
Here’s an example ad:
An anonymous real estate agent in the comments of Realty Thoughts’ blog pens three things you should avoid doing when selecting your real estate agent:
1. do not choose an agent because they have 8 on a widget on their blog.
2. do not choose an agent based on what strangers have said.
3. do not choose an agent based on how much commission they give back to you before you even enter into a transaction.
Put another way:
Not likely. But some people believe this. My guess is they came up short on a deal and decided the whole bunch of them–Realtors, that is–are sleazy sales types who would cheat their own mother out of a commission.
And there’s no shortage of voices against Realtors on the web. Read the comments section of any bubble blog or browse the real estate section of Yahoo! Answers and you’re bound to run into Realtor backlash. Besides NAR and the individual Realtors themselves, nobody tells the other side. So, I now present a small sliver of the other side.
The endorsements below were received in a matter of 24 hours on behalf of one Realtor who signed up with RealtyBaron.com:
It’s hard not to believe this Realtor goes the distance for all his clients. Bottom line: hard-working, ethical Realtors do exist. You just have to know where to look.
Of all the moving parts in our system, AgentRankâ„¢ is the most difficult to communicate. Most people look past the role it plays in pairing homeowners with an agent. Frankly, I’m surprised how often homeowners choose the default value of 1 (out of 10). However, when I designed the system, it was the “eureka” moment. Without it, the system would be fertile ground for bottom-feeding, hungry agents who would inevitably disappoint homeowners.
I’m always trying to think of “real world” examples to use as comparisons. A few weeks ago, credit scores came to mind. Borrowers with better credit scores typically are seen as less risky and, as a result, receive a better interest rate. Today, however, I thought of an even better one while shopping for a printer with my Consumer Reports ratings in hand at Sam’s Club. AgentRankâ„¢ is nothing more than an objective rating assigned to a Realtor representing the quality of service a consumer can expect.
Just as consumers don’t have to test each and every printer when armed with Consumer Reports ratings, consumers don’t have to interview and haggle with each and every Realtor operating within 10 miles of their home. They simple pick a number–1 to 10–and let the bidding begin.
Speaking of AgentRank(TM), I added two more components earlier this week:
Market forecasts will be used to measure an agent’s knowledge of price trends. By comparing the agent’s forecast of median sale price against the metro prices reported by the National Association of REALTORS®, we’ll identify agents who have exceptional insight into the local market.
Weblogs will be used to measure an agent’s authority on matters of real estate. The popularity of an agent’s weblog in the blogosphere will help identify agents who are considered the experts in their local market and beyond.
Zillow launched MyZillow earlier this week allowing anyone to save a list of favorite homes and track their Zestimates after signing up for an account. It didn’t take long for mortgage brokers to figure out how to profit from it:
Every time a broker does a refi, they can use the appraisal to work up the estimate to match the real value. Then you can save that estimate in MyZillow. You get a monthly report on that homes value. Now you know about how much the home has appreciated, and how much of the mortgage is likely paid off. With this data, you have a pretty good idea of your existing client base’s equity, and can market to them accordingly.
Based on this information, you could send out reminders that they may have reached 80% LTV, and should look into getting their MI dropped. Or, you could send out offers on HELOC’s, or Cash Outs.
Not only do I fail to see how Zillow can possibly prevent this, but it’s also an end run around Zillow’s core business model–advertising. How long before we see a website using Zillow’s API to help manage marketing campaigns on behalf of mortgage brokers?
FYI, I’m not Zillow-bashing here. I’m hoping someone–Zillow or otherwise–can debunk this because the last thing I or anyone wants are more mortgage offers in the mail.
CORRECTION: False alarm. Somehow I skimmed over the fact the broker was referring to a previous client…not a prospective client as first thought. Not so sinister after all.