What do you think about Real Estate marketing?
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So I did a Google search and used the Keywords “Sell My Home” and the
following adwords ads came up. The first one says “$2500 Sells Your House”

So, when the homeowner calls and says, “OK, I will pay $2500 to sell
my $395,000 house and I want you to pay the Buyers Agent 3% for doing
her or his job! How does that sound?”

Response. “Uh. Oh we can’t do that. We would loose money sir”

Homeowner, “The ad says $2500 sells my house. Are you telling me that
is not true?”

And once again another consumer believes, for good reason, and then
tells everyone that he knows that all realtors are liars that eat from
the same trough of sloppy greed and deception!

This form of DECEPTIVE ADVERTISING MUST STOP!

On another note. I was under the impression that it is not OK for
Realtors to use Realtor or Realtors in their web addresses. A team in
Pierce county has billboards everywhere that say
www.PuyallupRealtors..com and www.TacomaRealtors..com

So. If this type of advertising is acceptable and the use of realtor
in a domain name is OK then can I run this ad?

“$1 Sells Your Home! Just log on to www.StinkyRealtors.com We may not
shower but we are cheap”

What about MLS enforcement of rules???

Kirk

Residential: There was a drop in March ytd sales of 11%.  Year to Date average price jumped $60K or 14% from 2005 to 2006.  Average time on the market went down a few days in March, but stayed steady at 49 days. 

New Residential:  The nationally publicized unprecedented drop in new home sales was still evident in Seattle real estate market was almost 16% down March to March and about the same ytd.  Average price jumped almost $100K to $577K.  Average days on market went down from the previous March 12 days to 79 days.

Condo resales:  March to March units sold went down 12%, but overall ytd were only off less that half that.  Average price of a condo March 2006 was $299K vs. $248 the previous year a healthy 20% increase.  A sign of the viability of the condo market is the average time on market has dropped to 36 days in March 2006 from 54 in March 2005.

New Condos:  There are significant differences new vs total of all condos in price and average days on market which appears to show a trend to higher priced new condos.  Both ytd and March year to year prices are up 42% and 25%.  This came as a 39% drop to 84 units was experienced March to March.  Average time on market was double the overall average at 73 days for March 2006 down 10 days from the year before. 

Zillow enters crowded space

Part 1: Assessing accurate home values

By Bernice Ross - Inman News:

A hurricane the magnitude of Katrina has just hit the real estate industry. Did you notice?

Since its recent launch, the real estate industry has been buzzing about a new Web site called Zillow.com. According to Alexa.com, an Amazon Web site that ranks Web traffic, Zillow has rocketed to the top 200 Web sites in the world. That’s higher than Realtor.com or any other real estate Web site.

How did Zillow zoom to the top in real estate Web traffic? First, Zillow’s founders identified what the consumer wants when they visit a real estate Web site — access to listings and to comparable sales data. Second, Zillow’s CEO was the founder of Expedia. This well-funded team understands Web marketing. Third, the real estate community has been shaking in its boots — would Zillow be the next frontal assault on the full-service model? Would Zillow lead to more commission compression? These questions have had brokers and agents alike flocking to the Zillow Web site to see how this new business model will influence their business.

If Zillow is successful, Realtors will have to redefine their value proposition. Ever since inception, Multiple Listing Services have provided important sales documentation that was not available to the general public. Zillow provides not only comparable sales data, market statistics that show whether prices in a given area are increasing or decreasing, but it also provides its Zestimate of how much a given property is worth. The market data is particularly useful information for Realtors to know because it can assist them in helping sellers to set accurate list prices. It can also assist buyers in identifying how much they should pay. Where Zillow faces major challenges, however, is providing accurate values for its “Zestimates.”

Zillow’s success ultimately will rest with how well its algorithms evaluate comparable sales data and then supply an accurate sales price. The problem with Zillow’s model is that there are several other companies doing a better job of supplying accurate comparable sales data. Sadly, virtually no one seems to have noticed.

Over the last six months, several new companies have entered the realm of providing comparable sales information on the Web. The first entry into this foray was Trulia.com. Trulia’s goal is to become the Google for the real estate industry by working with brokers directly. This so-called “vertical” search engine will direct visitors to specific agent sites based upon the user’s search. In other words, rather than using the general Google search engine that generates lists of nursing homes, for example, when you search “homes for sale,” Trulia will direct its users directly to agent sites that match the client’s search request. This increases the accuracy of the search. According to Greg Sterling, an analyst with the Kelsey Group, this produces a better-qualified lead as compared to leads generated by Google, MSN or Yahoo. The Trulia search engine provides comparable sales, links to listings, as well as a mapping feature. As Trulia works with more brokers, their data will become increasingly accurate. Since they launched in July, their beta search engine contains a fair amount of data from California and New York, but is still unavailable in many places throughout the country.

Information on comparable sales is now available to the public through a company with its roots in providing comparable sale information for the appraisal industry. The former president of Dataquick, Mike Ela, has launched HomeSmartReports.com: , which provides accurate appraisal data on a seller’s home for $24.95. This detailed report not only helps sellers estimate their prices, it also includes information on the foreclosure rate, appreciation, as well as the high and low sales for the area. For $6.95, buyers can obtain information on comparable sales data on any home they are considering purchasing. With this report they also receive the assessed value of the property, the property tax amount, a report on foreclosure activity, sales volume, and a host of other information. The site also provides a mapping feature that plans the best route to show up to six properties.

For the last six months, I’ve been hearing commercials for a company called Moveup.com: . They provide comparable sales data for your personal property at no charge in states where comparable sales data is public record. (The “non-disclosure states” where this service is not available include Idaho, Indiana, Iowa, Kansas, Missouri, Montana, New Mexico, Texas, Utah and Wyoming.) When you visit the Moveup Web site, you’ll be asked for your name, property address and e-mail address. The search engine cross checks the public records to determine whether your name matches as being the recorded owner of the property address where you are searching. If these match, they send you all the comparable sales for your neighborhood. Unlike Zillow, which sent me comparable sales data that did not match the properties I was searching, the information for Moveup.com was spot on. Every comparable sale was appropriate to the property I was investigating.

Will Zillow really make a difference in our business? Will they still be in business three years from now? What challenges does this new model pose? To learn more, see next week’s article, “The Problem with Zillow.”

***

Real estate values need human interpretation

Part 2: Assessing accurate home values

By Bernice Ross - Inman News:

It’s probably safe to assume that the early surge in Zillow’s traffic resulted in part from real estate agents and brokers who fear what Zillow may do to their business. Are “Zestimates” (Zillow’s estimate of what your property is worth) something brokers should fear?

The billion-dollar question for the real estate industry is whether computers can do a better job of accurately pricing property than experienced agents can. Like many other brokers, I decided to put Zillow to the test by evaluating the properties that I have owned in the past.

When it came to selecting comparable sales on my home in Austin, Texas, Zillow did not select a single comparable sale from within the subdivision where I live. While the price was off by about 15 percent, the comparables were so far away that they were useless. Furthermore, every single comparable sale Zillow selected had square footage that was only 50 percent of the size of my home.

After testing Zillow for Texas, I decided to see if there were any more accurate estimates in Southern California. When I priced the properties that I used to own in Beverly Hills, Bel Air and Brentwood, the Zillow algorithms gave them a premium value because the lots were larger than 2 acres. What Zilllow didn’t take into account was that each of these properties was not flat — i.e., the large lot size resulted from the property being on a ridge with a downslope. It also didn’t differentiate between those properties with views and those that lacked views.

These examples strike at the heart of trying to use an algorithm (mathematical formula) to establish value. The computer has no way to tell whether a house has a view, is on a downslope or flat lot, or is in good or poor condition. It can’t tell if a property has airplane noise or strange smells emanating from a landfill. Ultimately, pricing a property is more of an art form rather than a process that can be reduced to pure mathematics.

I was curious to see if any of the other tools did a better job than Zillow. I have been tracking values on my house in Los Angeles and was curious what it would be worth once we expand one bedroom and add another bath. I used Zillow and Moveup.com to determine which approach would give me the most accurate value. The Zillow algorithms allow me to program in a kitchen upgrade, increase the square footage, and add in a new bath. Zillow’s Zestimate told me that without the addition, the property was worth $448,000. By adding a single bath and expanding one of the existing bedrooms, the value jumped to $660,000. A 50 percent price increase seemed way out of line given the nature of the improvements. I then went to Moveup.com. Each of the 15 comparable sales was appropriate to the area. Moveup.com provided the sale date, the square footage, the price per square foot, bedroom-bath count, lot size, and whether the property had a pool. Even with this data plus a deep familiarity with the area, I still couldn’t nail down what the exact price should be.

The challenge was with the comparable sales that were available. Normally, I would do a price-per-square-foot calculation. The rule of thumb is that you should only use properties that are within 10 percent of the same size for both the improvements and the lot size. In California, where the improvements are worth little and the lot is worth a great deal, you can skew the results by using properties that have square footage that doesn’t fall into the appropriate categories. Even with 15 comparable sales, none of them fell into the 10 percent rule that I would normally use. The price per square foot ranged from $243 per foot on the low side to $626 on the high side. The high prices per square foot were for very small homes with the high lot values. (Smaller houses in areas where the land is valuable always sell for a higher price per square foot — larger houses always sell for less.) The low price per square foot was for homes that were twice the square footage of the smaller homes. Since our home would be in the middle of this range, the best comparable sales put the property value at $450 to $518 per square foot. On a 1,300-square-foot property, that’s the difference between $585,000 and $673,000. In truth, the only way to resolve where the property should be valued would be to personally visit the comparable sales or to hire an agent who works the area and knows property values.

The challenge with relying on computers to establish value is the difference between stagnant data that exists in a database and knowledge that relies on human experience and complex thought processes. In the book “Social Life of Information,” John Seely Brown and Paul Duguid make exactly this point. A computer relies on information. When it comes to real estate, this means the property’s features, including bedroom-bath count, lot size and floor plan. Even when two properties have identical floor plans, one may sell for more because of the beautiful landscaping, the privacy, or some other factor the computer cannot access. The value of these features is often more intuitive rather than quantitative. As such, computers may estimate values, but the estimates will continue to be flawed because there is no scientific way to value these other factors.

While Zillow has made a big splash, accuracy is still the name of the game when it comes to comparable sales. In those areas where the market is flattening or declining, overpricing can cost the seller thousands of dollars. Rather than bemoaning the fact that comparable sales are now available on the Web, agents and brokers must be proactive in helping sellers to understand that sites such as Zillow and Moveup.com are a starting place in determining what their properties are worth. They must also be prepared to educate sellers about the challenges of relying strictly on information rather than a human being’s wisdom of experience.

Bernice Ross, co-owner of Realestatecoach.com, has written a new book, “Waging War on Real Estate’s Discounters,” available online. She can be reached at bernice@realestatecoach.com:

So what does this mean for real estate agents in Seattle, and in other Hot markets?  As we have said before, some slowing is going to be good for everyone, real estate in certain areas was simply too Hot.  My worries of a slowing turning in to a huge supply could be very bad for everyone too.  With the forecast of rates being increased in the future, I as a Seattle real estate agent have to worry.

More on what the rates will to do the real estate market in the near future. Stay tuned folks, and remember we see biased as we are real estate agents, but also know that we hold properties as real estate investments, and so we care more about our wealth accumlation from our investments than we do from our real estate transctions in Seattle or other real estate market!

Is it good news for Seattle and elsewhere around the country?
For the first time in 9 years the Commerce Department is reporting
Friday that sales of new SFR (single family residences) fell by 10.5
percent seasonally adjusted or annually 1.05 million homes. This
follows a 5.3 percent drop in January. There were a record 548,000 new
homes available for sale by the end of the month. At the current sales
pace, that represents 6.3 months of supply, the largest inventory of
new homes since January 1996, as reported by the Commerce Department.

Another significant statistic is that the national median price of a
home in February fell 1.6 percent to 230,400 from January. This was
the biggest single month drop since April 1997.

What does this really mean?
The unprecedented activity from the last 5 years is starting to slow.=20
It is the markets where the biggest speculation is going on where they
will most likely find the greatest swings in market price and sales as
investors caught riding the wave of the real estate boom attempt to
exit the market.

This very significant change in the market for new homes was not the
same in the market for sales of previous owned homes which actually
rose by 5.2 percent, but it was after 5 months of declines.

The Federal Reserve is watching closely the housing market and is
expected to raise interest rates again next week.

This news was contrary to the real estate sales more meaningful numbers to me, that is the home re-sale numbers. Those to me are the real bench mark, as most homes sold on the economic current are the existing home sales. And those numbers effect the real estate market more, because that is where the wealth of todays home owners is held. A Report released on Tuesday cited that the existing home sales, rose 5.6% in February. This caught me, a real estate agent in Seattle, by surprise.

So what is really going on the US real estate market? The economic data concludes, what I have been saying. It’s the jobs that are growing, the interest rate worries are making the home prices more reasonable. ANd, the real estate market slow down is welcome, and the real estate bubble is far away.

Notes from the NAR Survey
The pace of change was noted as increasing and key areas highlighted were:

1) Consolidation of Multiple Listing Systems. Realtors are on record
as strongly supporting an increase in the area a MLS covers.
2) The increase in the number of Real Estate Agents (Realtors) not
supporting the MLS use of public websites. 63%

3) An increased concern for the need for information security while
implementation of security has not increased.

4) Real Estate Agents where and are interested in the data
integration such as being able to attach documents to MLS listings and
value the increased use of maps such as on www.Xoompad.com
The survey highlighted that the success of the MLS and Real Estate
Agent business model hinged on the delivery of services superior to
those non-members would offer.

5) The belief by some respondents that unfettered public access to
data is not good for the industry

6) The increased use of transaction management systems from 16 to 22
percent. Over half claiming it strengthened thier customer
relationship.

The survey went out to 20,000 members and MLS official in Feb. 2006
and recieved 950 responses.

There are so many opportunistic groups and individuals wishing to cash
in some way in the Real Estate Market and with the DOJ breathing down
the backs of the Multiple Listing Services and thier member Real
Estate Agents. This promises to be an exciting year. If some clarity
does not prevail then we all risk being lumped into the same category
such as the way Car salesman and Lawyers are viewed in as in a similar
generalization. Differentiation is key.

Rule 196: Use of Term “MLS” Prohibited
Effective October 1, 2005, Rule 196 was modified to include language
that prohibited the use of the term “MLS” in member Names, domain
names, and web addresses (URLS). Furthermore the rule stated that
“…no member shall indicate or imply in any manner that the member is
a multiple listing service or that the public has access to or may
search the multiple listing service (e.g. “Search the MLS” or “Access
NWMLS”) on the member’s website or otherwise…”. “Otherwise” includes
flyers, advertising (audio, video, print etc…), and any other
communication by which a member states or implies that the general
public can search the multiple listing servic

An important exception that needs to be noted on the rule. 196 c.  Prospective Application. Rule 196(b) shall not apply to uses of the term “multiple listing service,” the acronym “MLS,” or derivatives thereof in members names which were in effect on the date this rule was adopted (4/29/05). Such prior uses shall include a disclaimer that provides that the member is not a multiple listing service but is a member of NWMLS. The disclaimer shall prominently and conspicuously appear in all of the member’s advertising and on the home page of the member’s website, any page from which visitors to the site may search for property, and any page on which another member’s listings appear.