I took part in the North SD County Association of Realtors meeting this morning, entitled:
“How Your Brokerage Can Survive in Today’s Economy”
It was at Jake’s Del Mar and included a free breakfast, so I thought I’d participate for once, to see if there was any hope. I have submitted my ideas to the association’s staff and board officers previously, to no avail.
Because they made a point to ask what we think, I’m going to memorialize it here for reference.
Whenever you get agents together, you’re going to get plenty of whining, and few ideas. After a long round of complaining about short sales, the current chairman knew he could call on me to change the subject. He asked me to comment on technology, and off I went.
These were topics I covered:
1. Videos– Every agent should include a video tour of their listings – it’s free and easy with a digital camera and youtube. Agents will say that they don’t know how to do it, but that doesn’t stop them from taking lousy photos. Video tours are the future, yet they are currently banned from being in the MLS remarks, due to concerns about self-promotion.
2. HomeDex– CSUSM’s Dr. Robert Brown was there to recite the most recent HomeDex data, his contribution to the real estate industry. But I noted how we don’t provide any interpretive direction or help – just spew data and let the consumer figure it out. The realtors don’t know how to explain it, and if they just go around telling their clients that prices have been going up for four months, they’ll likely lose a client.
Just reporting data with no explanation or interpretation is not professional sales.
3. Short Sale Procedures – I implored the local association to develop and inflict a uniform short-sale process. It’s no wonder nobody likes them, each listing agent does them different, and you never know what to expect.
If there was a set of procedures that every agent followed when negotiating a short-sale offer, at least we’d have some confidence there. With no rules or regs today, the listing agents pull all kinds of shenanigans, causing many clients and agents to despise them, and short sales in general.
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Shortly thereafter the meeting was adjourned, and I had a word with the chairman, Kurt Kinsey, who is a like-able guy and a 22-year veteran realtor. We discussed the vaunted Shadow Inventory, and I mentioned the recent foreclosureradar stats to back up my thought that banks are not sitting on REOs. The real shadow inventory are those who have received their notices of default, but haven’t been foreclosed yet.
Here are today’s numbers for SD County:
NODs = 11,700
NOTs = 8,595
REOs = 4,161, including 71 properties foreclosed today.
We know that a bulk of the 20,295 defaulted properties are in the loan-mod process, but I told Kurt that I think at least half of those could get foreclosed on during the next six months, and that demand is so strong that there should be a buyer for every one.
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Dianne McMillan, the CEO of NSDCAR, was next, and the first topic was enforcement – can’t we self-police ourselves and throw out the bad agents? She said that all they can do is fine up to $5,000, and make recommendations to the CA Department of Real Estate, whose complaint caseload is backed up 18 months.
I had to bring up you-know-who, the broker involved with at least ten cases of raising sales prices to enable six-figure kickbacks from the sellers. Those actions have cost lenders around $4,000,000, and not only is she walking around free, she got elected to be a director of the association of realtors!
How she got elected was slick – her district has 300 agents in it, but only eleven cast a vote in the election. Besides her own vote, she only needed to convince five people to vote for her!
I pressed Dianne on how this could happen, and she finally said that the people who vetted the candidates didn’t pick up on the previous problems.
NOTE to all vetting people and companies – GOOGLE THEIR NAME!
Dianne did admit to reading my blog about the incidents, and her demeanor was less than positive. She said I should get involved, but I told her I wouldn’t waste my time, primarily because the board coddles the new agents, to which she agreed.
There are other things – how about a feedback website? They could sponsor a website where consumers could comment on their agent’s performance, just like on ebay, and if a comment was negative, the agent would have a chance to rebut. But NSDCAR won’t do it because they need the dues, and as I was told the first time I brought it up a few years ago, “we’d just get sued”.
Or how about a thorough public MLS website, like in Houston: http://www.har.com/cs_body2.cfm
Or how about a simple blog to interact with consumers and agents?
There were cards in the middle of each table that went babbling on about how the NSDCAR “is about to become the single most important source of professional support ever”. We’ll see, it’ll take huge changes in the status quo to achieve it.
Whew, Jim! I think that target on your back just got a little bigger! 🙂
Jim, just have to shout a quick “way to go”, I have been enjoying reading your blog and your no spin, no nonsense attitude. We need more of that in our industry.
Keep it up.
Probably just me, but I’ve noticed a decided uptick in vetting this and vetting that over the last year or two, and I’ve had the nagging suspicion that it doesn’t mean much in most circumstances. Thanks for confirming that it indeed does not. Hopefully, your google recommendation will help!
Do you happen to know how many of those 4,161 bank owned properties are actively listed for sale?
I told Kurt that in previous spot checks around half of the REO inventory is listed for sale, or pending, and is understandable.
Between evictions, clean-up, and valuations there is going to be time spent on preparing the home for sale. An extra month and $5,000 will do wonders, and sometimes you get lucky. The previous 2xREO house was on the MLS eight days after the trustee sale.
In January there were over 6,000 REOs, so they’re selling them.
Interesting to see what goes on “behind the curtain”.
I always thought when you get a bunch or realtors together all they’d be able to talk about is some variation of “buy now or be priced out forever”.
Good stuff Jim!
First Jake’s in Del Mar is the best! Love that Hula Pie!
I love the idea of having a comment based website for realtors. I buy everything I can on Amazon for this exact reason. My research takes about 3 minutes because I look for the product that has 350 people rating it 5 stars and boom the product is amazing.
It is ironic that you can use this information to buy a book that costs $5.00 but can’t find this information to use on the biggest purchase of your life.
Redfin already does this.
Redfin already does this.
Thank you propertysearch!
Redfin, zip, zillow and all the rest have been streaking ahead on developing the most relevant websites, leaving Sandicor in the dust.
Even an agent has a better website than the MLS itself (sdlookup).
If Sandicor wants to hide behind the IDX, go ahead, but letting agents do their own website leads to 10,000 diffeent sites, in an environment where one dominant site is what’s needed.
I also reiterated with Dianne what I thought of Tempo 5: a bad idea from the beginning, poorly launched, never improved, and still worse than it’s predecessor.
Speaking of she who shall not be named. The Bressi Models you mentioned a week or so ago as postponed were not postponed. They went back to the bank and are in the process of being sold off in a bulk sale.
Jim-thanks for the info. That was my impression as well (that very few REO properties are just sitting idle), but others disagree with me.
If you have data (Sandicor) the way to make money off it is to create an api that others can hook into and use for their sites. That’s how things work in computers. There’s just as much $$$ available providing data to websites as there is providing a user interface for end users (buyers).
A side effect of this model is if you provide the data to a large number of sources. The more sources you provide to the less likely competitors will try to provide the same data. Also if you control the data everyone uses info on every website is the same.
Shadash, yes, but that would take brains. Sandicor seems to be in short supply.
Doesnt angie’s list review realtors?
“and not only is she walking around free, she got elected to be a director of the association of realtors!”
Now that she is in this position, is a meeting/motion tabled to demand/ask for her resignation?
“Video tours are the future, yet they are currently banned from being in the MLS remarks, due to concerns about self-promotion.”
What?
Each MLS listing already includes the realtor’s contact information which is already a form of self-promotion. Why would the MLS be worried about the presence of even a bit of self-promotion in a video? If the realtors promoted themselves excessively instead of selling homes, they wouldn’t sell anything at all!
Someone over at the MLS doesn’t get it.
Jim, we know you’re not a self-promoting egomaniac in your videos. You save all of that for your highly reflective realtor signs! 🙂
Maybe I don’t get it, but what does SANDICOR do beside limit realtors sales tools and make up rules to inhibit those sales?
Who are they protecting besides their own jobs?
Regarding videos are the future, I respectfully disagree. Producing a quality video is at least an order of magnitude harder than producing quality still photographs. Since most agents can’t even produce quality still photographs, I don’t see how video tours will become standard for most homes. High-end properties where the price justifies the cost of a professional production will be the most common use, but as a status symbol rather than conveying any more information that still photos.
Videos are linear access, meaning if I want to see just the master bedroom, I have to wait for the rest of the video to roll, or try to skip around with the slider. And I can’t tell in advance if the MB is even on the video.
In web design class they taught us that animation is best reserved for conveying concepts of actual motion or change. Animation for its own sake is distracting. Remember the web’s early days of blinking fonts, flashing borders and dancing “under construction” signs? Using full-motion video to display a static product (the best houses ARE stationary, right?) just doesn’t make sense to me.
Jim,
Great post. I think I’ve found a realtor’s blog in Atlanta that is close to yours: http://georgiarealestatevoice.com/
I’ve had the chance to talk to her. But she’s still not in your league. This is the best I’ve been able to find around Atlanta.
You’re offering ways for the NAR and their local offspring to have greater transparency. Something most of us clients want.
The NAR should have “conflict of interests” somewhere in their title.
Ross, it’s not just about the video. Going through a house with a camcorder allows nearly the entire house to be covered from all angles along with giving us a sense of how it would feel to actually live in such a home. You simply can’t get that from a series of pictures.
And the video doesn’t even have to be professional. The problem with professional productions are that they’re usually heavily packaged products that can be used to deceive potential buyers, which is why I don’t trust them. But a video that’s shot in near real time and posted with hardly any editing will have none of the fake packaging, and can potentially deliver key information on the home that the professional package would have hidden away in post-production.
We don’t ask for Jim’s videos to be professional looking; all we ask is that the videos remain informative and if possible entertaining. Jim clearly delivers the goods, and many other realtors can accomplish the same goals if they put just a bit of effort into it.
Thank you Francois, I couldn’t have said it better myself.
Consumers are tired of the slick, polished presentations that highlight the positives, and ignore the negatives.
People want “Cops”, not “T.J. Hooker”.
A basic walk-around video is all that’s needed, but do agree it is very unlikely to happen. If they were allowed, we be seeing more bad than good, based on the quality of MLS photography.
Ross, I agree with your point in general, however Jim’s videos are an exception. They convey volumes more than a slideshow, much of the info being his dialog.
But you raise some very valid points as to why it is not ‘the future’ of all RE listings, and I would have to agree.
Because he does it so well, it does give Jim an edge though!
Speaking of conflicts, the NAR spent millions to keep banks out of the real estate business, yet proudly advertise the new Realtors Federal Credit Union where you can get home loans, and are still proponents of realtors being mortgage brokers too.
I’m not sure if San Diego is that different from the rest of the country, but the 4th quarter could bring a serious wake-up call…
http://www.calculatedriskblog.com/2009/08/first-time-home-buyer-frenzy.html
A few key points:
# This has boosted existing home sales, and will continue to boost existing home sales (reported at close of escrow) through November.
# This will put upward price pressure on low-to-mid level homes during this period. This is the also the target price range for most cash-flow investors.
# At the same time, the foreclosure moratoriums and modification programs have limited supply – especially in the low-to-mid priced areas.
# This level of first-time buyers is completely unsustainable – even if another tax credit is enacted. There was significant pent up demand from potential first-time buyers who were priced out of the market in 2004-2006, and then were afraid to buy as prices fell. But demand from these buyers will wane.
# This doesn’t help the mid-to-high priced market because a large percentage of sales are distressed (REOs or short sales), and there is no seller to move up.
Expect a surge in existing home sales (and some new home sales) over the next few months. Expect prices at the low end to rise (simple supply and demand). Expect all kinds of reports that the bottom has been reached.
Expect the frenzy to end …
What’s always cracked me up about MLS and even most realtors sites is that they have less real information, imagery and accountability than your average eBay listing. I’ve seen wonderful listings for $2 items on eBay that make the information and pictures I see for multi-hundred thousand dollar homes look ridiculous.
The truth is simple. Realtors, as a group, have failed terribly and their associations have failed right along with them. Sure, there are exceptions be they JTR or some other local agent that actually does deliver service. But the vast majority of realtors are in the game because it’s easy money and it (at least it was) big money those people could never have made in any other industry.
Real estate web sites will continue to displace realtors for a long time to come because of the very easy to fill vacuum these used home sales people and brokers have created.
One anecdote. I’m a photographer. I do commercial and political work most of the time but last year I hit a slow spot and tossed out a special offer to every local realtor and brokerage. $50 and I come in and professionally shoot a house. Fifty bucks. On a home where the realtor is generally going to make thousands of dollars, I asked for fifty bucks to shoot a home. I got some takers then got bored with it but before that I had more than a few interesting conversations with realtors and brokers the gist of which was, they wouldn’t bring me unless the seller agreed to pay them an add-on marketing fee, the cheapest one of which was $170. Yes, you heard me right, they wouldn’t pay for it unless the seller agreed to pay for my services marked at least three times. And each and everyone of those of realtors I spoke with used either a cell phone camera or a cheap point and shoot to post a few shots (usually one) of their listings. Yes, I checked.
Most realtors are pathetic people with no pride in their work, no commitment to any client but themselves and a work ethic that would get you fired anywhere else. Is it a wonder that people such as “she who shall not be named” get elected to advisory boards and administrative panels? Most realtors take pride in someone like her. The evidence seems clear on that.
What I really admire about Jim is that he provides sellers/buyers with videos and comments “on the ground” that are shown as soon as he can get them up on his site. People want (and need) REAL info as soon as possible. More realtors need to respect sellers and buyers–like Jim does–instead of the constant dribble from the NAR of “It’s a great time to buy (or sell)”.
Didn’t Jim say in the Nightline piece: “People just want the truth”? I, for one, do and am thankful that Jim is so different than most of the realtors I’ve met over the years.
Jim’s videos (and his dialogue) do show/tell the truth. He may not get some Oscar for professional editing, but who cares? Just my two cents, but the info his videos and comments provide is priceless–because we ARE making the biggest financial decision of our lives…
Video IS the future. Many MLS systems allow video (including ours in New Hampshire, Maine and Massachusetts).
Video DOES help sell homes. More importantly, it also helps sell realtors as professionals who know how to market. As someone who does 3-6 video tours every day for Realtors, I can attest to the fact that they DO help sell homes – it’s proven time and time again. It’s a way of putting you on an entirely different playing field than your competition.
However, BAD “do it yourself video” that most agents will attempt themselves with a cheap FLIP camera does nothing to help sell a home OR help sell a Realtor as a professional. It’s the “moving picture” version of the abysmal MLS photos that 95% of Realtors put out there to supposedly help sell their listings. Many of the “do it yourself” videos I see online are beyond watchable – if that was my agent I would fire them on the spot.
It’s the same argument for stills – pictures HELP SELL HOMES. Studies have proven this for years. Quality and quantity of photos. Yet, it takes 2 seconds to find listings with a couple of photos which usually look like they were snapped with a cell phone or as someone was driving down the street!
Whether agents want to understand this or not… it’s a FACT. Buyers…. almost ALL buyers…. are making decisions at 2am in their bunny slippers on a 15″ computer screen. Based on what they see, a home goes on the short list to be seen… or they hit the next button… and it’s over. Whether you think it’s ‘right’ or ‘fair’ is absolutely irrelevant. They do it for one reason: BECAUSE THEY CAN. Period.
Curb appeal of yesterday is WEB appeal today. Those agents who are smart businesspeople and know and understand how to market are very successful because they know that presention online is EVERYTHING.
If you were a buyer would you rather see this (http://tinyurl.com/npjgyf) or this? (http://tinyurl.com/22oogz) By the way, these are REAL videos. You can’t make this stuff up.
Is it not worth a $400 investment for good quality video and photos to sell a $500K home? A smart businessperson/ marketer would absolutely say YES.
It’s really a no brainer, yet 95% of Realtors just don’t get it. They just don’t.
As for not being able to quickly “look at the kitchen” or “see the bathroom”… that is NOT how people watch video! People search based on their requirements… they look at PHOTOS quickly… they read the description.. .and THEN if they are still interested, they watch the video. Video is the LAST thing (and final qualifier) that people view, not the first. And not only do they watch it, they scrutinize EVERY detail, and most likely watch it more than once. And guess what? You then have a very serious customer!
Interesting about “she who shall not be named”. What are the scariest letters of the alphabet??? Answer: IRS and FBI.
I agree about lazy unprofessional agents – nothing irks me more than one crummy photo, or photo of toilet bowl, little or no description, statements that property is “Corporate Owned” (bs for bank owned), illiteracy (how about “cassida” for “casita”), no disclosure of NOD or short sale, or “seller in process of contacting lender about possible short sale”, showing instructions – no phone # for seller, just “go direct” only to find seller in shower or “go direct, don’t worry about pit bull in kitchen, she is friendly”. Sorry, but it really irks the hell out of me. The DRE should insist on a sanity test as a condition licensing.
I was shocked how bad Sandicor MLS user interface was.. SRAR uses a tempo based system and it isn’t great but it is infintely more intuitive than the interface Sandicor came up with.
With the rise of Smart Phones, in addition to the up and coming Tablet devices and various Net Books – there are going to be lots of additional tools available to the tech savvy on the go. With the right tools, these could be extremely useful when out house hunting.
Smart Realtors and companies like RedFin, etc will all add these to their arsenal.
http://www.ft.com/cms/s/2/307fff62-87a4-11de-9280-00144feabdc0.html
Meant to paste part of the article:
“With it, househunters will be able to whip out the phone in their neighbourhood of choice and point it at the target street. Any house for sale that comes into view will be tagged, with full information and even a phone number, which can be dialled at the touch of an icon. Users will even be able to make a bid by phone.”
You could drive around and see all of Jim’s geo-tagged videos. 🙂
Jim,
Can you set up some sort of an “organization”or “association” that will be built on common sense unlike SDAR?
Start with an exploratory committee?
sdnerd,
There was a very interesting interview I saw a while back where Charlie Rose was talking to Marc Andreesson, founder of Netscape, about the present and future.
http://www.charlierose.com/view/interview/10093
It’s about an hour long, but well worth the time. The specifics to the discussions here that I’d point to would begin at 45:30 and 48:10.
It will be very interesting to see what survives after this recession and what new innovation comes out the other end. I would certainly hate to be an investor in commercial property. There will be too many businesses primarily online, that there will be no need for all those retail buildings. I think the housing and consumer bubble was the only thing that even kept them around this long.
****
excerpts from the transcript…
“Ah. So in the meltdown of 2000, 2001, 2002, we were
the nose on the dog. So we were if not the cause, we were one of the main
catalysts for the stock market crash at that point.
This time around, we in the Valley are the tail of the dog. So we
have been affected least so far out of I think all of the sectors in the
economy. And I think there’s a couple of reasons for that, but the big one
is because companies in the Valley generally don’t run on credit. We
generally run on equity financing as opposed to credit financing. So my
company has no debt. If somebody doesn’t want to roll over our debt, we
don’t have any debt to roll over.”
***
“And so to the extent that, for example, media
companies or financial service institutions or whatever — real state
companies, whatever — are being damaged because of the crises, to the
extent that the Valley is creating the kinds of companies that are going to
be in those markets in a big way, we will tend to benefit, because we will
tend to be playing offense rather than playing defense and worrying about,
you know, whether we can pay off our debt or whether we can roll our loans
over.”
****
“That’s the kind of new thinking and new approach that innovation can
bring. I mean, it could be — or should be the new source of credit. And
so, the need to repair an old bank that has this outmoded credit card
infrastructure that’s really not needed anymore, it’s not clear to me how
many hundreds of billions of dollars of society’s resources we should take
to try to keep the past sort of in business when there’s a newer and better
way to do things.”
Jim, what camcorder (model/brand) do you use for your videos?
Thank you.
If Sandicor is that bad (and from what I’ve seen, it’s pretty bad) how would one go about creating a competing product? I could get together with some of my fellow furloughed civil servants and do some midnight engineering.
Oh yeah and one more thing … why does Sandicor treat open houses like frickin’ top secret classified information? As far as I can tell, SoCalMLS and MRMLS don’t!