Monthly Archives: April 2010

Does Size Matter? (Part 2)

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In Part 1 of this series, I examined a scholarly paper by one Glenn Reynolds(aka, Instapundit, who is a law professor, the author of Army of Davids, and one of the most important and influential bloggers in the United States today) about the future of big law firms and drew some lessons about how big law firms and big real estate brokerages are similar.

In this part, we focus on how they’re different.  And before you say, “Duh, Rob” (or since you’ve probably already said that, before you say it again), of course lawyers are not realtors, and law firms are not brokerages.  But there are lessons to be drawn from some of the fundamental differences as they go to issues of business models.

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Does Size Matter? (Part 1)

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Pocket Hercules (Photo by Sam Greenwood/Getty Images)

Aaaaand I can hear the tee-hee’ing going on in Costa Mesa from here.  While I’m not above making cheap jokes in order to erect a logical argument about brokerage performance, business dysfunction, and customer satisfaction, this post is actually about serious issues in real estate, technology, and marketing.  So stop giggling.

We begin with a question: does the size of a brokerage matter in real estate?

I have argued in the past that the Big Broker holds the key to the future of the real estate industry, and that small independents and boutiques will end up surviving on the good graces of the various titans in their markets.  Of course, that argument was counter-factual at the time I made it (over a year ago now) and I conceded that as the industry was then, big brokerages were boned.  What I argued then, and still believe to some extent, is that the Big Brokerage with the will to change has the resources to do so.  But in the almost year and a full quarter since I wrote that post, I don’t know that I’ve seen too many examples of such visionary brokerages.

Meanwhile, technology continues its remorseless march.

Then comes this paper by one of the pioneers of the blogosphere: Glenn Reynolds, aka, Instapundit, the Beauchamp Brogan Distinguished Professor of Law at the University of Tennessee.  If you’re at all interested in the impact of technology and of the Web (and its offspring, social media) on the real estate industry, I urge you to read it in full.  While it is a scholarly paper published in a law review, it’s written in plain English for the layman, and does not deal with legal issues as much as it does with business and social issues.

The implications are profound, and the questions Reynolds raise are significant.  And insofar as law is the epitome of professional services, and one that many realtors look to as an example of client-driven professional services, changes in the legal business model are something we should pay close attention to.

This will be a multi-part post, as the topic is large enough and complex enough to warrant breaking up into bite-size pieces.  This first part focuses on understanding Reynolds’s argument as it applies to law firms, then extrapolating similarities to real estate brokerages.

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Rebecca Jarvis: Got Evidence?

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So this morning, I do something completely unusual for me: I turn on the TV and watch one of the morning shows while sipping coffee.  I normally never turn the TV on except for NFL games, maybe ESPN, or something special I really have to see.  But I did today, and happened to catch a segment on CBS Early Show where a Rebecca Jarvis, on how to avoid common real estate mistakes.  This is the associated web story (I am looking for the video of that segment right now).

In that segment, and the associated story, Jarvis brought up some good solid advice as well as a couple of points that I found… shall we say, “interesting”.

First, she thinks the #1 mistake that sellers make is that they pick “bad agents”.  The advice, then, is as follows (from the web article linked to above):

Find someone who has successfully sold similar homes in your area. When you’re selecting an agent, ask them to show you three recent sales of homes comparable to yours in price and location. You may also want to look at their asking price-to-selling price ratio.

Hmm.

Second, she advises buyers to retain a real estate attorney:

You may want to consider hiring a lawyer. It’s the only person in a transaction that’s not incentivized to get a deal done. A real estate attorney will charge flat fees and offer objective advice.

Uh-huh.

Some questions and thoughts from yours truly follow.

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Just Because You Can Doesn’t Mean You Should

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So this post will likely depart significantly from my normal topics of discussion: real estate, marketing, technology, etc.  Well, it might touch on technology… and who knows, it might find its way back to something useful.  But probably not….  That’s why this is my personal blog, not a series of industry white papers.

Was talking to a friend recently and she said that her teenage daughter just got dumped by her boyfriend of a year (which is a long time when you’re like 14 years old) via text message.  Now, I’ve heard of things like this before, but this one happened to come at the heels of a blogpost I read by my friend Melissa, also known as Single Gal In The City, about dating in Portland:

“There are so many shy guys,” Laura, 27, said. “And there’s a fine line between coming on too strong and helping them to overcome their shyness.”

Amy moved here from Iowa last year and says she doesn’t recall a man ever approaching her. Nina says Portland men are like the weather — soggy — and unwilling to go out on a limb.

“Men here don’t take initiative,” she said. “They don’t look at you twice or come up to you.”

What in the world… really?  Seriously?

So on the one hand, American men are now too spineless to make the first move on a woman, but they think it’s fine to dump the ye olde girlfriend via text message?  What’s next, divorce papers via FaceBook?

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Real Estate Video Is Dead, Encore

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I happen to agree 100% with my old friend Joel Burslem over at 1000watt on this:

This technology is also a truely democratizing force, meaning your marketing collateral can now compete with the best that Madison Avenue can cook up. In the eyes of consumers, a boutique brokerage can now sit on a level playing field with the big brands with their multi-million dollar ad budgets. No more hokey Handi-cams. Please!

The listing video they use to highlight is an excellent piece of craftsmanship.

I love that the video stars the homeowner; who else would be as passionate about the house, or be as expert on what it’s like to live there?

There’s a second part of this “video is dead; long live cinema” idea.  More after the jump.

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Transparency, Real Estate, and Consequences

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“There’s no such thing as a free lunch.”

- Milton Friedman

There are certain topics within the real estate industry that keeps coming back from time to time, like Freddy Krueger or Jason Voorhees.  The future of REBarCamp, raising the standards of professionalism, broker brands vs. agent brands, and so on. Some topics, you wish would just freakin’ die already (like one might feel about say Freddy Krueger) while other topics, you wish would live on forever like Mick Jagger and Cher.  Although I doubt I’d shed more than a single ironic tear were Jagger and Cher to hang up their spurs and retire finally, so to speak.

One of the more interesting recurring topics is the issue of “transparency”.  I put quotes around that word because it isn’t really clear what is meant by transparency by the different folks who talk about it, but the general notion appears to be that realtors, brokers, MLS’s, etc. ought to make more data and information available to the public in order to (a) drive innovation, (b) benefit consumers, (c) help brokers, (d) all of the above, (e) and so on and so forth.

An excellent recent post on UrbanDigs, the blog of Noah Rosenblatt, raises the issue of transparency once again.  The nice thing here is that because Noah is a real estate agent in the People’s Republic of Manhattan, where a MLS most definitely does not exist, he has a perspective on transparency that is a wee bit different from that of others who work in MLS-enabled markets.

As I read the blog post and the comments that followed, I began wondering if those who are in full-throated support for “transparency” have truly considered the cost of transparency.  This is not to say that transparency is a bad thing; indeed, I tend to argue for greater openness and greater transparency.  But I do so with some awareness, I think, of the costs involved.  Some folks, however, appear to think that transparency, like “social media”, is some sort of a magic bullet that carries no costs at all.

Well, there ain’t no such thing as a free lunch.  In that spirit, let’s take a moment (or six) to think about transparency, real estate, and the consequences of such.

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