Greg should disclose the secret weapon mentioned – because if the new website isn’t substantially better than Zillow, then we are wasting our time and money. His list of features is not impressive, and no one is going to leave Zillow – consumers or agents – unless he has a spectacular idea up his sleeve.
Having our own portal is a good idea and within reach if every agent chips in a few bucks. Are there enough who care? Most will assume it is a duplication of the MLS and not really needed.
But the reason we need it is because having our own portal would help create the ultimate club for agents. Let’s build the portal outside of the N.A.R. and other top-heavy administrative bodies that suck down profits yet provide little if any benefits to agents themselves.
You would think groups like N.A.R., C.A.R., Zillow, big brokerages, etc., provide some structure for the industry, but they don’t. Yes, there are rules, but nobody enforces them. Brokers who are supposed to be supervising their agents will look the other way if it means making more commissions.
We don’t even need rules – an agent’s reputation among their fellow agents is enough to keep them in line. The rule most broken is the sharing of listings with fellow agents, but that’s been abused for so long that most agents don’t remember signing that form when they joined the MLS. We will have to live with single agency (aka dual agency for now), but it is already upon us anyway.
More of the upstart companies are choosing to advertise on radio and TV, and distorting the truth is widespread. If we eliminate all the unnecessary money-grubbing entities, be honest with ourselves and the public about the (no) rules, take the gloves off and fight it out with our fellow agents for the business while cooperating on our own powerful portal, then the best agents would survive – which is ultimately what the consumers deserve.
Thanks daytrip for sending this in – a surprising verdict, and if it wasn’t such a high ticket price, it may not have gone this way:
MSNBC host and former ad exec Donny Deutsch scammed a real estate broker out of a $1.2 million commission in the sale of Deutsch’s $30 million Hamptons home, a Manhattan judge seethes in new court papers.
Justice Charles Ramos says Deutsch’s lawyer was acting on his client’s behalf when Sotheby’s broker Edward Petrie was schemed out of his 4 percent commission, The Post’s Julia Marsh reports.
Petrie had brought a potential buyer, LA hedge funder Howard Marks, by Deutsch’s Tyson Lane home in 2010.
After Deutsch realized he knew Marks, he went behind Petrie’s back and brokered the sale privately to avoid the fee, Petrie claimed.
“This court considers that and refusal to acknowledge [Petrie] as the broker to be marks of dishonesty and greed,” Ramos writes in the Oct. 23 decision awarding Petrie’s employer, Sotheby’s, $1.2 million.
“Both characteristics are particularly unbecoming when exhibited by those blessed with great wealth,” the judge scolds.
A representative for Deutsch says, “Mr. Deutsch is shocked and outraged by this ruling, which is wrong based on law and fact. The ruling was based on the Sotheby’s broker’s contention that Mr. Deutsch agreed to a 4% commission arrangement. This is an outright and absolute lie. There was no such agreement, neither verbal nor written, and internal Sotheby’s email communications confirm this. Mr. Deutsch will vigorously defend his position in court and is very confident this decision will be reversed on appeal.”
Notorious Rob has a series of posts about the new CEO for the National Association of Realtors, and the future of the realtor industry. The interesting part is that the current president of the N.A.R. responded, which only brought up more questions.
The first two posts get into how Bob Goldberg became C.E.O. But the post linked above could be a catalyst for change. Hopefully the N.A.R. folks are listening, and are serious about doing something to help agents!
With so much focus on HGTV real estate shows, it’s inevitable that our marketing will go Hollywood too:
A woman in a red dress twirls with a dark and mysterious man through light-filled hallways. Music flutters and surges in a romantically lit courtyard overlooking the twinkling city. A mischievous coda plays, and then the credits roll.
It’s a classic scene plucked straight from Hollywood. But this eight-minute mini-movie is far from a silver-screen blockbuster. It’s a real estate advertisement for an $8.5-million, 1.5-acre compound in Encino:
Successfully marketing a mansion now requires much more than panning shots from an iPhone or even expensive videos shot by drone. Real estate agents with luxury listings are now experimenting with full-on property movies — films featuring actors, story arcs, scores and Tinseltown-caliber cinematography.
“The classic old-school walking tour of the house is becoming more and more obsolete — with all the content that’s thrown at us these days, it’s hard to hold someone’s attention with that,” said Kristine May, who directed the Encino shoot and owns If I May Films in Woodland Hills. “People get attached to a story, and they want to stick around and see what’s happening.”
So what if the narrative and performances are sometimes more Razzie than Oscar? Real estate agents contend that movies showcase their properties in a way that helps buyers envision themselves there.
Real estate agent Ben Bacal, an early innovator of high-gloss property films, worked with married clients Ori and Nafisa Ayonmike to craft a $20,000 film to market their home in Hollywood.
The Ayonmikes star in a fictional narrative that begins with Ori skulking through the sleek, contemporary rooms of his 5,500-square-foot, five-bedroom estate. In the next 11 minutes, Ori tells Nafisa he wants a divorce, a passionate fight ensues, Ori gets kicked out and Nafisa chucks her massive diamond ring into the pool.
Amid all the high drama, production company Rafiki captures the home’s 20-foot ceilings, high-tech security system, marble fireplaces and tony Hollywood Hills neighborhood. The video of the property listed at $3.65 million has generated nearly 61,000 views since being posted on YouTube last year.
Online video platforms have become a key component in property sales. Some 36% of home buyers used YouTube, Vimeo or another video hosting website in their search last year, despite only 8% of real estate agents using film in their marketing strategies, according to the National Assn. of Realtors.
Bacal posted another movie trailer-esque listing video last year for a Bel-Air property, in which two children develop Ferris Bueller fevers and spend the day playing hooky. The pair splash in their infinity pool, shoot golf balls over the Los Angeles skyline from their lawn, try on outfits in their generous closets and have a puppy delivered by drone.
The 14,230-square-foot spread sold in December for $39 million.
Typically, the filmmaking cost is covered by either listing agents, sellers or both. Movie-style real estate videos can cost anywhere from $5,000 to upward of $30,000 to make, directors estimated.
“With a record number of home buyers out there, this is officially the most competitive, fastest-moving spring housing market in decades,” said Javier Vivas, manager of economic research at realtor.com. “Following a furious start to the season, the median days on market for homes on realtor.com in May is the lowest since the end of the recession, and marks the first time that 1 in 3 homes is selling in under 30 days nationally.”
The median age of properties on realtor.com in May is 60 days, which indicates that properties are selling five days (8%) faster than this time last year, and two days faster than last month.
“The lack of affordable inventory remains a critical issue, particularly for a growing number of first-time home buyers and millennials lining up for starter homes and urban dwellings.”
So where in the U.S. are things the craziest—those places where homes fly off the market the fastest, and buyers are up all hours, clicking on listings? When we pulled together this month’s list of the hottest markets in the country, the top markets were a one-two punch for the Bay Area, with San Francisco (including nearby Oakland and Hayward) at No. 2 and Vallejo, just to the north, at No. 1.
I don’t think a faster-moving market is crazy – instead, the tight inventories have caused us to naturally evolve to quicker pace. It’s not just the buyers – agents, lenders, appraisers, and inspectors all move faster now, and you could say, ‘it’s about time’.
Words like ‘craziest’ are just headline porn – the market evolution is on track.
Is there a potential benefit to slowing it down?
Agents dig the face pace – buyers and sellers have less time to think, and deals close quicker so we can get on to the next one.
How would sellers and buyers benefit from slowing down the process, and how could it happen?
Imagine if we eliminated the ‘Coming Soon’, ‘Sold Before Processing’, and other ways that agents wrongly tilt the table. Instead, we adopt an industry-wide standard process for selling homes so everyone has a crack at buying each house. After all, shouldn’t that be in place already?
If everyone knew that the seller would pick the buyer on Friday afternoon (or some other deadline), then we’d have an open, honest, and predictable marketplace. If we added a open bidding process at the deadline, the resulting transparency would help even more.
The frantic running-around today is from agents abusing the system, which causes buyers to pull their hair out every time they lose a property unfairly. They are determined to get the next one, no matter the cost, because they abhor the way they are treated.
You could say that the realtors’ unethical behavior that has helped to create the frenzy does benefit the sellers. Most will say that as long as sellers benefit, then all is good.
But is it a long-term solution?
We will eventually run out of buyers who are willing to put up with this environment. Then what, another dip? Great.
The conversion to The Slow-Down Plan outlined above (adopting a industry-wide process for selling homes) is our soft landing. If we continue at a break-neck speed with no solution in sight, won’t we crash….again?
The onslaught of new-fangled ways to sell homes is getting bogged down in their own zeal – there are so many choices now, which way do you go? You have the sexy off-market package driven by celebrity realtors above, or the typical new-age mobile app at a discount below:
The widget that spends $100 million/year on advertising.
The scarcity of sales should drive more agents out of the business, and the those agents who remain will be increasingly focused on putting their own buyers and sellers together.
We have the listing agents who hold listings off-market in order to find their own buyer, but there are also agents who will do ‘sold before processing’ with an outside agent. This happens quite frequently.
If a listing agent isn’t going to round-trip the commission, and instead let a second agent represent the buyer – why wouldn’t you do what is best for your own client (the seller), and expose it to all agents via the MLS?
An old veteran agent told me that he hoped he would sell his new listing before MLS input, and he did – and an outside agent represented the buyer. The house had been vacant for years so there wasn’t an occupant who held up the showings – all he had to do was install a lockbox, take a few photos with his phone, and spend 15-30 minutes doing the MLS input.
He did input the listing onto the MLS after he found the buyer, so was it the installing of the lockbox and taking a few photos too much of a burden?
Why wouldn’t he do what is best for his seller?
He must either be flat out lazy, or he wanted everyone on the MLS to see that he was the latest to breach his fiduciary duty. It is like a badge of honor!
The realtor business is slowly eroding right before our eyes.
Part of a realtor’s job is to help manage expectations – not only those of their own clients, but expectations of the other agents and their clients too.
Recently I received an offer on a listing that was 25% under the list price. They also wanted my seller to carry the financing for 30 years – which is unheard of – and oh yeah, it was contingent upon the sale of the buyers’ home too.
I told the agent (whose email-signature noted they were in the Top 10 statewide for their company) that if I was the seller and that offer was presented, I’d fire my agent.
Just like when we’ve seen a home with range-pricing that is too wide, it becomes impossible to bridge the gap – for three reasons:
Once a buyer puts a number on paper, their mind starts believing it’s real.
Buyer’s remorse is real too, and they cool off quickly.
Sellers are skeptical, and don’t feel like negotiating much.
It may be discussed as just a place to start, but once a buyer submits their price in writing, it becomes a comfortable number. Going much higher than where they start is usually a function of how fast agents respond. My rule-of-thumb is two counters max for each side, in less than four days.
In this case, my sellers weren’t desperate, they had already determined that they wanted to sell for at least 93% of list and were willing to wait for it. I told the buyer’s agent that our price gap was too big, and I nicely asked the agent and buyers to go back to the drawing board.
Three days later, I received a new offer with bank financing, instead of seller-carry, but it still had the original price of 25% under list. It came with the buyers’ love letter; a full-page of reasons why my listing was the perfect fit for the buyers.
Was the love going to make the looming price gap surmountable?
In spite of houses around the county selling for 99% of list this year, we countered with a price that is 4% under our list – not bad, considering the original offer price. On their counter, the buyers came up to 82% of list, but it took two days to arrive. I knew the remaining price gap and time left wasn’t looking good.
I always want to respond promptly, because of #2 above – buyers cool off quickly. We dropped another 2% within a few hours, but it wasn’t enough. Two days later, the agent emailed that they lost interest – no counter, no love.
Five days gone by (seven days since the original offer), and the initial 25% gap killed our chances. They knew before writing the offer that it would take at least 93% of list to buy the property, and they still offered – so initially there was some willingness to pay that or close.
If they would have started at 82% of list, and trimmed the time spent to 3-4 days, could we have made it to escrow? I think so!
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