For Sale By Owner Homes

I’m still hearing fall-out from the DOJ/NAR suit settlement and reporters are still dithering about the meaning of it all.

Laurie Janik, the NAR’s general counsel, said in a telephone interview here, that the settlement would have no real impact on home buyers or sellers.

“I don’t think they’ll see anything different,” she said. “This lawsuit never had anything to do with commission rates, or discount brokerages.”

However, others interviewed for the article had differing opinions:

Norman Hawker, a business professor at Western Michigan University who organized a symposium on the Justice Department litigation as a senior fellow for the American Antitrust Institute, predicted that the settlement would ultimately mean a drop in sales commissions of 25 percent to 50 percent as a result of increased competition.

“It’s pretty clear that there was an enormous amount of discrimination against brokers who were trying to use innovative business models,” including discounted fees and virtual offices on the Internet, he said. “There are lots of entrepreneurs who have been looking for a green light in the form of this order to begin offering discounted rates. It has the potential to be a big step forward for consumers.”

There are many parts of the country which did not stop or hinder MLS’s from sharing, publishing and allowing access by online and discount brokerages.

Are commissions there any less than those other cities or states that did?

No.

So why would this business professor assume that this would happen? His comments seem pretty easy to check out by comparing sharing v.s. non-sharing states, but I’m disappointed it goes unchallenged by the New York Times reporter.

Contest

Wouldn’t it be easier to just get a new attorney?

Google Inc. Chief Executive Eric Schmidt said that the Internet search leader hopes its recently acquired advertising service DoubleClick will aid newspapers as they struggle to corral more online revenue.

“It’s a huge moral imperative to help here,” Schmidt said during a question-and-answer session at an event hosted in San Francisco by Syracuse University’s Newhouse School of Public Communications.

Without providing specifics about how it might be accomplished, Schmidt said DoubleClick’s system for serving up online display ads could generate “significant” revenue online for newspapers.

There’s been much concern and controversy concerning the drop in relevance of newspaper real estate ads.

Seattle’s a two newspaper town but due to a Joint Operating Agreement, only the Seattle Times publishes a Sunday newspaper.

Real estate ads reign supreme on Sunday, but the section’s a mess with random ads scattered over a dozen or so pages. It’s impossible to find the property in the price range and neighborhood you want without reading every single page and filtering out the unsuitable properties.

The best solution I’ve seen so far is the “booklet” published by such papers as the Santa Barbara News-Press. It’s published by a company called Classified Concepts, and they make an incredible interface by selling classified Open House ads around an area map. Visually and graphically, a buyer can see the house location in an easy-to-carry magazine format.

Though I respect the Fourth Estate and the honorable separation of the editorial and advertising departments, I am tired of journalists publishing press releases verbatim from real estate vendors.

The unthinking and unquestioning publication of press releases from alternative online real estate companies is ironic to say the least. Our local bricks-and-mortar real estate firms spend hundreds of thousands of dollars every year in newspaper advertising. Online firms, who NEVER advertise, get so much ink that you’d think the editors and reporters were on the payroll.

Reporting news is good. Endlesslessly pushing and promoting online companies that will NEVER BUY ADVERTISING is bad journalism and poor judgement.

Press Release Journalism?

ZipRealty Launches Real Estate’s First Certified Pre-Owned Home Program

Sawbuck Realty Website Serves 1,000,000th Listing

Redfin claims sale of $7M home

Trulia Launches Self-Service Marketing for Real Estate Professionals

With the passing of the same sex marriage law in California, the estimated 100,000 domestic partners in California will have the opportunity to join millions of other Americans in holy matrimony. While California braces for the onslaught of applications for marriage licenses from same sex couples due to the historic California Supreme Court decision to legalize same sex marriage, same sex marriage protesters and gay rights supporters are preparing for rallies across the state.

In the midst of the controversy to legalize gay marriage, San Diego real estate company Wellsford Realty is offering to pay for the wedding reception for same sex couples married in California when purchasing a home, condo, or vacation home using their services.

“It’s more than showing appreciation for our customers,” Michelle Koert of Wellsford Realty said of their Pride Promotion. “We understand that domestic partners want all of the securities and happiness that investment in a home has to offer a couple. We encourage same sex couples from out of the area to purchase their vacation home in San Diego.

We used to call it “mattress money”. Money not in banks and not accounted for in usual ways, used to fund home purchases, usually by ethnic groups not likely to trust banks or safety deposit boxes.

Now Richard Branson of Virgin Air fame has tried to legitimize this practice with his new company Virgin Money.

Their website offers “real estate loans” but is really only a servicing company for borrowers who have already arranged to borrow money from friends or relatives. Virgin Money makes their dough by servicing the loans.

“Full Closing with Escrow” includes escrow services in addition to a full closing. They formalize the loan, ensures that taxes and insurance are kept current, and transfers ownership to the buyer with an official closing in a flat fee of $2299 + $19 a month for each month one has the loan. Apparently, you go to them with the amount borrowed, the interest rate you’re paying and other terms of the loan already negotiated and they just handle the paperwork.

As you know, transactions between family and friends are increasingly being structured as private mortgages. In these situations, friends, family and home sellers act as a bank and finance part, or all, of the purchase.

Virgin Money provides proper loan documentation and professional repayment management that protects the emotional and financial interests of all parties involved, while still keeping wealth in the family. And, we handle the fun stuff like accounting, year-end reporting, and tracking down late or missing payments. Well, we think it’s fun.

In our MLS Purchase and Sale Agreements, we have a clause where the Buyer certifies that they are not relying on any contingent source of funds. When making one’s offer contingent upon a home loan, it’s usually not contingent on one from Aunt Sarah, but from a recognized commercial lender. Exactly how does one prove one is getting this loan? I suppose if they fund this private loan ahead of time and show proof of actual funds, that might fly. But I don’t want to be the first agent to try this….

And Virgin is a huge well-funded company, why would they dabble with these small potatoes? They’d have to have 100’s of new clients a month to compensate them for the trouble and liability.

The Bank of Mom and Dad

Mr. Goldberg attempts to throw down the glove at Dream Realty in Florida.

Two years ago, seeing the success of Craigslist, Microsoft created Windows Live Expo. Hopes were, it was going to be a “Craigslist Killer”. It didn’t work out that way, however, and MS announced that the site will be discontinued at the end of July.

According to a message on its homepage, users can no longer create a new account, post or extend listings, or upgrade listings to “premium.” Although Microsoft hasn’t commented on the reasoning behind Live Expo’s departure, there’s speculation that because the service wasn’t as well advertised as it could have been, it never took it off in the way the company would have liked.

Online classifieds continue to be dominated by Craigslist, and none of the major players have been able to mount a good product to compete successfully. Google has Googlebase, which hasn’t seemed to take off with the real estate crowd, though here in the Pacific Northwest, Windermere and Coldwell Banker Bain has supplied them with a feed. Ebay has Kijiji. There’s Backpage, owned by Village Voice Media. Oodle, Vast, LiveDeal, now Overstock and literally hundreds more. None seem to have gained the traction that Craigslist has. Even with the looming threat of elimination of html, Craigslist will probably continue to reign supreme.

As an agent, I know that I have very limited patience with manually entering my listings to all of the sites out there. I’d much rather put it on one or two aggregators and call it a day, as I don’t have an assistant to post my listings on every single classified website in the entire universe. With the MLS, you get your listings posted automatically on every other real estate website and my brokerage, Coldwell Banker, is now supplying a feed to Zillow, GoogleBase and Trulia. If I make a Postlets ad, then it gets on Oodle and Lycos and Hot Pads. Manually entering each one of my listings to each of these sites is too labor intensive. Though it’s noted that each ad to Craigslist must be manually loaded, if it didn’t work, we wouldn’t do it.

Microsoft shuts down Live Expo classified ads site

The Washington Post had a story, Your Friend, Your Agent?, debating the merits of hiring your frends v.s. hiring some stranger to assist one in a home purchase or sale.

The article includes several stories of buyers and sellers who chose relatives or friends over someone they didn’t know, and discussed the merits of each choice.

One point of advice it gave:

Before you choose to work with a friend, ask yourself what type of agent that person is. If you are moving out of the area, does he have the experience and affiliations to find you a home in another state or country? Also realize that an agent will be privy to your financial data and other personal information.

If you are staying local, will you continue to have contact after the transaction? If hiring someone destroys your friendship, what other parts of your life will be affected? Do you have mutual friends, share a place of worship or spend holidays with the prospective agent? If your friend is doing you a favor, even reducing his commission, would you hesitate to ask questions, tell him you are not completely satisfied or disagree with his advice? And when it comes to doing the deal, you want someone who can negotiate so that you’re confident you were properly represented.

I would think that NOT hiring your friend would be more likely to destroy the friendship than hiring them.

The foreclosure man, Richard Nakamura, is on a tight schedule these days. Business is booming, even in the relatively prosperous Greater Seattle area.

It’s never-ending, the list of homes, condos and even entire apartment complexes that Nakamura visits in his Toyota pickup. He’s got a Wi-Fi-ready laptop on the passenger seat, a printer on the back seat, a GPS device to guide him.

Foreclosure man: I’m the bearer of bad news by Erik Lacitis

From the Associated Press:

“The Justice Department gave a boost Tuesday to online real estate brokers — and potentially their clients — by forcing new industry policies that give Internet-based agents access to home listings they were previously denied.”

Supposedly, this was done to make the playing field level for smaller and/or online real estate brokerages. However, the opposite may occur.

From SEO Theory - SEO Theory and Analysis Blog

The National Association of Realtors has allowed local associations to withhold listing information from online realtors whose mega sites tend to outperform local realtors’ sites in some search results. Search engine optimization specialists have been aware for years that the hyperoptimized real estate vertical is one of the most highly competitive search markets.

The consumer may or may not benefit from the settlement, considering that local realtors offer opportunities for face-to-face discussions that online forms and search tools simply cannot provide. The fact that local realtors have little to no search visibility in some critical search terms may imply that the Justice Department has in fact created an unfair business advantage for an already overwhelmingly powerful industry group.

Local realtors just don’t have the resources to compete with the mega sites, and the U.S. Justice Department’s lawsuit fails to take this imbalance of search positioning resources into consideration. From a search perspective, the Justice Department’s action may have the exact opposite result of its original intent in that it may very well limit the competition. After all, most searchers will never look beyond the first ten results shown to them and major search engines have no incentive to show the best results for queries where they are already showing acceptable results.

On the surface, the NRA is being required to treat online brokers as if they are local brokers by granting them full access to local brokerage shared databases. The search engines already treat online brokers the same way, and the reviewing court might very well take the view that consumers’ best interests are not being served well by restricting online brokers’ access to data (which they apparently make little or no contribution to themselves).

It has been my perception for a while now that the ones that may have the “unfair advantage” may be the online real estate firm, well-funded, working with venture capital and well-versed in search engine optimization and online marketing. This ruling may give them even more of a leg-up and further erode the full-service bricks-and-mortar real estate brokerage.