Notorious R.O.B.

Conversations about the real estate industry, marketing, technology, and public policy

What A Real Estate Website Should Be

I could, theoretically, go on for a few thousand words on this topic.  What should a real estate website look like?  What should it provide visitors?  What design, what usability, what philosophy should it embrace?

I could do that, yes.

Or I could just tell you to go see this.

Seriously, Redfin is doing some incredibly great work.  Trulia and Zillow get the lion’s share of the attention in our industry, but I take my hat off to Redfin.  And folks commanding far more respect seem to agree.

I urge my friends at Realogy to buy Redfin now, before the price goes up any further.  They understand how a real estate website should be done.  The Big Guy that buys up the talent at Redfin will have made an extremely worthwhile investment — assuming you can hold on to all that talent.

-rsh

Most Appropriately Named

From Inman blog comes news of this new organization:

The Association of Associates Representing Sellers (AARSTEAM), a just-launched for-profit corporation that is open to membership by independent, non-Realtor agents and brokers who work with sellers, promotes an “Oath of Actions” that may rubsome buyers (and their agents) the wrong way (see Inman News).

One of the things that members must swear to is a solemn pledge not to disclose “a seller’s days on market to any potential buyer at any time.”

While I can’t actually believe that an organization named itself Arse-Steam, I think in this case, it is most appropriately named.

-rsh

Peter Flint Interview and The Significant Misconception

I didn’t realize earlier that the great interviews Dustin Luther got with Marty Frame and Alex Chang that I commented on here and here were of a series. Coz, I’m a RE.net newbie. They’re all worth a read. His latest is no exception. He got some great answers from Peter Flint, CEO of Trulia.com (total aside: Pete looks a little like a more masculine version of this guy, doesn’t he?).

There’s little question that Pete “gets it” about the future of real estate. However, I noticed that he — like many others in our industry — suffers from a cognitive dissonace, that I hereby name, The Significant Misconception.

Among his answers is this passage:

I don’t think it is a stretch to say that the big brokerages are only just beginning to use their websites to create a compelling consumer experience that competes with REALTOR.com. Why do you think it has taken the national brokerages so long to complete on this front?

Building a great site is REALLY tough and it is hard for large brokerage to attract the engineering and design talent to do all this effectively. Brokers should be building strong online experiences, but they shouldn’t be distracted from their strengths and core competency— selling homes!

Now, dozens of executives at large brokerages would heartily agree with Pete. Literally thousands of agents would nod their heads and say, “Preach on, Brotha Petah”.

They all suffer from The Significant Misconception.

(Before you go start making the effigy for the apparent arrogance of yours truly, do bear with me a moment.)

Read the rest of this entry »

Culture of Arrogance vs. Culture of Ignorance

This being election season, I suppose it’s inevitable that we’ll see politics infecting every conversation, including those on real estate and marketing. As a fairly longtime veteran of the political blogosphere, I want to keep the focus just on real estate, marketing and technology. But this has to be addressed, because I fear that we’ll draw all the wrong conclusions from it.

Pat Kitano at TransparentRE quotes a Huffington Post article with approval, suggesting that there is a culture clash coming in real estate between a culture of arrogance and a culture of collaboration. Mark Lesswing at the Center for Realtor Technology picked up on the idea and expanded it to talk about Persona 1 vs. Persona 2, etc.

Pat drew a nice chart entitled Culture 1.0 and Culture 2.0 that you really do want to take a look at fully. But let me delve into a couple of examples.

Methodology Microtrend messaging – create separate campaigns for different constituencies and hope contradictory messaging isn’t exposed. This is “politics as usual”. Macrotrend messaging – develop unified messaging to the masses. Stay on an unwavering course builds a platform of integrity.

So “Culture 1.0″ is the highly targeted demographically-aware data-driven marketing that not one real estate organization has mastered to date? But “Culture 2.0″ is unified messaging to the masses, otherwise known as Mass Media?

I think Pat is much smarter than this; it must be the blinding cult of personality surrounding His Obamaness that is affecting him. Considering the recent Hillary victories, it appears to me that the boisterous proclamations about the Obama-method were a bit premature. Maybe that old Culture of Arrogance is alive and well after all.

Here’s how I, a supporter of neither St. Hillary nor His Obamaness, would classify things.

Hillary’s “Culture 1.0″ methodology is pre-cluetrain last-generation database marketing. Let’s dissect the audience, spot microtrends and microgroups, BUT never tell them the truth. No Interest Group Left Behind, but none of them truly knows what Hillary thinks or stands for, because she’s trying to be Everywoman to Everybody, triangulating like mad. Is she going to stay in Iraq? Or pull out? Is she pro-business or no? Is she actually religious or just mouthing empty words? It all depends on your particular “microtrend” and what you need to hear in order to buy the product. This is more or less the definition of database marketing.

In contrast, Obama’s “Culture 2.0″ methodology turns out to be Mass Media Communication, of the variety invented sometime in the 50′s with the advent of television. His is a throwback campaign, to John F. Kennedy’s, but without the substance. It’s a pure cult of personality, long on style and rhetoric but entirely empty of actual policies, actual ideas, actual answers. Witness the recent amateur hour on what he really meant about NAFTA or not… or maybe… oh but I had no idea. Come on. And then there’s “I’ll invade Pakistan” kerfuffle. Long on style, short on substance. That’s almost the definition of TV advertising.

And in contrast to both of them, McCain’s “Straight Talk Express” campaign turns out to be cluetrain-empowered. Well, as cluetrained as politicians can be, considering their whole modus operandi is to be flexible with the concept of truth. Conservatives despise McCain for a number of his positions, but they can’t accuse the man of peddling a bunch of bullshit. They can think he’s an idiot for McCain-Feingold or think he’s a traitor for McCain-Kennedy, but they can’t say he isn’t sincere. Unlike either of his opponents, people know where McCain stands on issues like Iraq. Neither glamorous nor micro-targeted, McCain is just trying to be McCain — that cantankerous, maverick, American hero — and letting the people decide for themselves. This is more or less the definition of cluetrain marketing: markets (and voters) are conversations.

But enough of politics. Let’s apply this to marketing.

The danger of embracing tags like “Culture of Arrogance” is that the opposite is not the “Culture of Openness” but the “Culture of Ignorance”. It’s fine and dandy to talk about leveraging existing “macrotrends” and grassroots marketing and so forth, but at the end of the day, you either know how house values are assessed for tax purposes, or you don’t. You either know that rainwater drains towards the house from the hills behind it, or you don’t. You either know how to value a home for sale, or you don’t. You’re either an expert, or you’re not.

This whole “Let’s work together” approach is wonderful, but let’s face facts here. The only reason why I’d want to work together with a real estate agent is if he or she knows shit that I don’t. If she knows as much (or as little) as I do about the market, about the neighborhood, about the house, about zoning regulations, tax rates, school quality, etc. etc. — then why bother? Just because I need another ignorant opinion? Because I’m just itching to give away 6% of the sale price?

No thanks.

Even in the Cluetrain world, there is a value to expertise. It would be extreme folly to believe otherwise.

The challenge frankly isn’t to make the jump from the so-called Culture of Arrogance to a Culture of Collaboration. The challenge is to go from Culture of Arrogance to Culture of Conversation — conversation in which one side is an expert, does know things the other does not, and is not going to take advantage of that fact to peddle some weakass bulltwaddle. Not triangulation and obfuscation, but honesty and authenticity, rooted in expert knowledge and experience.

At the end of the day, the American people want to elect someone they can trust, someone they believe is an expert in things that they themselves are not, and someone they think can get things done for them. The same with homeowners and home buyers. They want to work with someone they believe is an expert, someone they can trust, and someone they believe can get things done for them.

You can get there in three ways.

Microtrend-em, figure out what they want to hear, and tell them whatever lies you need to tell.

Or you can make a cult of personality out of yourself, speak in big empty words — “Yes, You Can Renovate This Fixer Upper!”, or maybe “This Neighborhood Represents Hope and Change for You!” — and hope they’re just blinded by your personal charisma.

Or, you can become an expert, and without condescension, without obfuscation, just have a conversation with them about their needs, their hopes, and tell them the truth and advise them as best as you can.

I know which agent I would hire; and so do you, I think.

-rsh

Analyzing the Move, Inc. Earnings Call

Move, Inc. — the folks behind Realtor.com and Top Producer — held its Q4 2007 earnings conference call recently. The transcript is available on Seeking Alpha. I think it’s well worth your time to check it out in full.

Move did $286M in 2007, vs. $280M in 2006. Considering the shape that the real estate market was in during the second half of 2007, that’s quite an accomplishment. What’s more amazing is that Move grew Q4 revenues by 2.4% to $71.7M in 2007. Michael Long, Move’s CEO, boasted:

In 2007, the toughest real estate market in 50 years, we grew revenues in our core real estate businesses, Realtor.com, Top Producer, and New Homes, amid unprecedented disruption and volatility. Revenue from Realtor.com and Top Producer on a combined basis was 10% higher than 2006. For the year we also delivered the highest EBITDA margin in our history and generated positive cash flow for the third consecutive year.

They’re in great shape.

Beyond the fact that they’re making money during tough times, I found three really, really interesting things from that call.

Read the rest of this entry »

Actual Bad News? Or More Doom & Gloom Anti-Hype?

This is not good news:

After suffering a beating from their exposure to home loans, banks and securities firms are about to take their lumps from office towers, hotels and other commercial real estate. And the losses could last longer than those from the subprime shakeout.

As the economy wobbles and financing costs rise because of the credit crunch, commercial-real-estate values are starting to slide, with analysts at Goldman Sachs Group Inc. projecting a decline of 21% to 26% in the next two years. That means misery for securities firms with exposure to commercial-real-estate loans and commercial- mortgage-backed securities.

Thing is, after the last crash in commercial real estate, lenders and institutions were supposedly far more disciplined.  The WSJ article even mentions that:

If there is a silver lining, it is that the excesses that overtook the U.S. housing market aren’t as prevalent in commercial real estate. Overbuilding of shopping malls, office parks and other commercial property hasn’t been rampant, although vacancy rates are climbing in such markets as Orange County, Calif., and Las Vegas, which have been hit by the weak housing market.

I’m not in commercial lending, so I can’t speak to the truth of this story or not.  But one would think that (a) condo flips didn’t exist in commercial, and (b) the institutions should know better.  That certain markets are hard-hit can’t be denied.

At the same time, unless there is an actual, deep recession, with many companies going out of business, this might be a great buying opportunity for commercial investors with cash.

-rsh

What Did Your Friends and Family Say…

when you told them that you were going to pursue being a real estate agent?

I’ve never been one, but I have started my own company, and this post really resonated with me.

But the most interesting thing that came out of our conversation that day was this…my friend said that a co-worker former co-worker asked him, “Do you think you be able to find another job like this one.” To which my friend said, “A job like this one…where I am underpaid and there’s no chance for advancement…yeah I can find “that” job. Those are everywhere.”

Working for myself has opened my eyes to a lot of things. Mainly, I could have been a better employee to former employers and living below your means allows you to do “stupid” things like quit your job and start your own business. It’s an adventure and trying at times, but most things worth doing aren’t easy.

Thing is, I figure, real estate agents are all independent contractors who don’t get paid, don’t get health insurance, etc.  They eat what they kill, as far as I know.  It’s sorta like starting your own business.

What sort of responses did y’all get when you told your friends and family you were going to do real estate?  Horror? That look of pity? Congratulations?

-rsh