Happy Halloween!

Use Trulia Heat Maps to identify the well-endowed neighborhoods in your area (i.e. by highest average home price) and follow the red brick road.

Zillow blog Homes with a Scary History

8 Halloween Blog Post Ideas for Real Estate Bloggers

When it comes to property’s paranormal history, it’s buyer beware

Legal Guidelines for Selling your Haunted House

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Redfin has announced that they will discontinue “Sweet Digs”, the blogging program they instituted several years ago for each of their major markets. They paid individual bloggers, most with no real estate experience, to write about real estate in their respective cities. They initially hired 7 writers, and each were paid $200 a week, so this move should save them at least $5000 a month.

One of the problems that Sweet Digs had initially was that they were limited to discussing just their own listings, or risk violating MLS policies about “advertising” other agents listings without permission. They were first fined $50,000 in 2007 for doing that, but apparently didn’t learn their lesson and they were fined $25,000 again just 6 months ago.

I suppose $75K in fines and $5K a month in employee salaries, plus the costs for all the links they buy on Curbed (386 links and counting) wasn’t worth the SEO, even though it did propel them to the top of real estate search in many cities.

But if there aren’t any buyers, what’s the point?

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Four speakers from different aspects of Paul G. Allen’s life will share the stage at a civic banquet on Oct. 30 to pay tribute to Allen, this year’s recipient of the Seattle-King County First Citizen Award.

Bill Gates, James Kelly, Sen. Patty Murray and Tod Leiweke will share accolades and anecdotes when they talk about their connection to Allen, founder and chairman of Vulcan Inc., and some of the reasons for his selection as 2008’s First Citizen. This year marks the 70th anniversary of the prestigious award, which was created by the Seattle-King County Association of Realtors® (SKCAR) in 1939 to celebrate community leadership, volunteerism and public service.

Paul Allen is an empire builder and with his vision, he has changed the look, feel and vision of Seattle. He owns 2,600,000 square feet in the South Lake Union neighborhood. He’s developed new residential, office, retail and biotech research space and this redevelopment represents one of the largest urban revitalization projects in the country. His employees lobbied the Mayor and Seattle City Council to upzone this and other neighborhoods around the city, changing the social fabric and the conversion of Seattle as parochial backwater to bustling cityscape with distinct high-rise urban villages.

I have mixed feelings about his accomplishments and contributions to our city. On one hand, I appreciate his philanthropy, his donations to the UW and his creation of his Brain Institute. On the other hand, I’m not sure I approve of the uh…. Vancouverizaton of the South Lake Union area. The most interesting neighborhoods grow organically, made up of residents, shops, shopkeepers, services, art and public spaces. I do not believe that planned communities can ever match the vibrancy of a neighborhood that has developed over many years. His South Lake Union community has created residences to house the workers that work there. Like a glittery, upscale company town, it’s a fancy rat cage for the little mousies that can’t step off the treadmill for fear they’ll lose their granite-countered condos.

I am also bitter about problems that only Paul Allen could have solved. I don’t fault Bill for not funding certain frivolous community pet projects. After all, he has a family and is busy saving lives with his Gates Foundation. But Paul, he’s buying yachts and his favorite sports teams and venues, the EMP and the Science Fiction Museum. If he can spend his money on those boy-toy sort of things, he could certainly spend some of that on some of my favorite civic projects.

One of our biggest losses was the Kalakala. a former ferry that operated on Puget Sound from 1935 until its retirement in 1967.

Kalakala was notable for its unique streamlined superstructure, art deco styling, and luxurious amenities. The vessel was a popular attraction for locals and tourists, and was voted second only to the Space Needle in popularity among visitors to Seattle during the 1962 Seattle World’s Fair.

After its retirement in 1967, the vessel was sold to a seafood processing company and towed to Alaska to work as a factory ship. There, a group of artists discovered the rusting hulk in 1984, purchased the vessel, and managed to refloat her and tow her back to Seattle in 1998. The vessel has since been a source of controversy as its owners were unable to raise sufficient funds to refurbish the vessel or even to keep her moored in Seattle’s Union Bay. That’s where Paul Allen could have stepped in. The vessel was sold in 2004 to a private investor, who moved it to an anchorage in Neah Bay provided by the Makah Tribe. Who knows what’s going to happen to it now.

What a great opportunity Paul had, to keep the Kalakala in Seattle and moor it in South Lake Union, at the Center for Wooden Boats and near the Armory where the Museum of History and Industry will be relocating.

It’s probably not too late. He could buy back the Kalakala, restore it, turn it into a floating museum or fancy dinner ship or what ever he wanted. Paul Allen owns the worlds largest privately owned yacht, the “Octopus” plus an entire fleet of other yachts, including the Tatoosh and the Meduse. He obviously loves boats and feels an affinity for the sea. This would have been the perfect public works project for him and the citizens of Seattle.

As you can see, I’m still bitter about this lost opportunity.

But I’ll be there, at the dinner to honor the things he has done right. It’s this coming Thursday, October 30th at the Sheraton in Downtown Seattle. Though this civic award is sponsored by the Seattle King County Association of Realtors, anyone can attend. Click HERE for tickets.

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Apparently so, from this ad posted on Craigslist. Why not just re-hire the people they let go? Is it so they wouldn’t have to pay health insurance?

With all their technology, heat maps, search functions, blogs, forums, statistics, pie charts and graphs, Redfin should have just entered the market with a traditional pricing structure and no rebates. They could then have the best agents with no labor costs, as those agents could be very successful. Redfin would be happy, agents would be happy, clients would be happy, and I’d be hanging my hat at Redfin.

With their technology and marketing skills, they’re already offering something better than the average brokerage, they don’t have to give a discount on top of that. They could charge the actual costs of their services instead of giving so much away (like their profits) and combine the best of today’s technology with the high-touch techniques of traditional agents. They would be an awesome force in the real estate business.

Instead, what they’ve done is challenge the rest of the real estate establishment to meet them technologically, and many have stepped up to the plate with their own new innovations. I have a new interactive map on my website that has a following function, so that it appears that every listing is MY listing. My firm is also offering agent and home videos online and a home-planning service that emails buyers new listings that fit their criteria as soon as they hit the market. We even allow buyers to review and submit offers online, if that’s what they want to do. Though we’ve been online before Redfin was even “born”, real estate brokerages might not have made the move from static searches to map searches. I still find them slow and buggy, but for some folks who aren’t as familiar with the neighborhoods, they may find the maps preferable.

Maybe now’s the time for Redfin to sell their technology to another firm who can actually make money with the concept. It’s just so brilliant, what with the blogs, the forums, the meet-ups, the FAQ’s, the outreach to Amazon, Microsoft and Google employees.

Thanks for all the ideas, guys.

(NOTE: The original job listing was removed, but a new ad for Contract Agent for Redfin was posted on October 22nd.)

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A beautiful old house just came on the market in my neighborhood on Capitol Hill. It’s owned by Stephen Rotella, who was president and chief operating officer of Washington Mutual when it failed last month after failing from bad mortgage losses. He’s selling his home with an offering price of $6.25 million.

Rotella, who was president and chief operating officer, is entitled under his current employment agreement to a cash severance of $12.7 million if he is terminated or quits with “good reason.”

He and his wife Esther bought the house for $3.78 million a few months after Rotella arrived in Seattle, from KING-TV newscaster Jean Enerson, in June 2005. It’s a 7,430-square-foot house and has five bedrooms, four-and-a-half baths, a wine cellar and a fountain in the yard. It’s located on almost an acre of land on the top of Capitol Hill, right behind Lake View Cemetery, where Bruce Lee is buried. Quiet neighbors.

More info and photos at The Stranger and in The Seattle Times.

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So now Zillow’s doing lay-off’s too, as they’ve let go 25% of their workforce this week.

In its current permutation, I have no quarrel with Zillow and actually enjoy their product, read their blog, and use their valuations. With good comparative sales information, I find their value ranges pretty accurate, and I like the aerial photos and supporting statistics about each home.

Because of Rich Barton and Lloyd Frink’s success of bringing travel to the Internet at Expedia.com, they probably assumed that they could do the same thing with real estate. They’ve always claimed they had no intention of disintermediating agents, but Barton did say he thought the role of agents may change and that he thought agents were overpaid.

Barton was quoted as saying that inevitably real estate services and fees will change as online services take hold.

“I’m not implying that we have some new commission model figured out, but it feels like . . . Realtor services are going to be unbundled a bit,” he told Inman Real Estate News.

Since then, however, they’ve bent over backwards making nice with real estate agents. In the beginning, it was first thought that home buyers and sellers were their clients. But now it’s apparent that real estate agents are.

Real estate agents and other real estate support services such as mortgage professionals, these are Zillow’s true clients, as they’re the only ones actually, literally buying what Zillow has to offer. While millions of buyers and sellers might come to the website, they’re not spending any money there. But the real estate agents are, so it’s imperative that Zillow makes the real estate agents and real estate related businesses happy. Without the real estate ads, their revenue source would dry up. They’ve taken on the role of agent’s de facto business partners, to augment the information that agents are able to provide to their customers, and to be a portal that brings eyeballs and clicks to those who buy the ads.

What I appreciate the most about Zillow is that they haven’t found success using our product (listings), but creating their own with their unique value algorithms, aerial, street and hybrid maps, statistics and market reports. Where Trulia uses our listings to attract eyeballs, Zillow is actually creating unique content to lure homeowners on to their site. Zillow does have listings, but they still have valuable content without them.

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I can’t say that I’m surprised. The whole premise of the company was built on the idea that real estate agents are overpaid and that technology and automation can streamline the system and reduce costs. High volume and easy sales is what is required to keep the ball in the air, and with the recent slowdown in the housing market, there just aren’t enough closed sales to pay the salaries of the workers.

Individual agents can be more nimble than a corporation with salaries to pay and health insurance to fund. If the market slows down, individual self-employed agents can adjust their spending, perhaps rely a bit on savings or their spouse or partner. Companies that pay a salary will be under-funded in a market downturn.

Traditional real estate firms either collect a desk-fee whether or not their agents make a sale, or they collect a percentage minimum. Even the least-productive agents are going to be able to make their nut in a year and fund the coffers of their brokerage. With a firm such as Redfin, where they pay a base salary whether or not any sales close, will always be at a disadvantage in a down or fluctuating market.

As they’ve discovered the volume of closed sales has to be very high to reach any kind of profitability. And with a high volume, agents and employees can be spread so thin as to compromise competent individualized service.

The money that Redfin refunds to Buyers is not from the Seller. That money is burned up in the salaries of the executives, agents and IT professionals. The money they’ve been refunding is the millions of bucks of venture capital. They’ve been taking money from Madrona Venture Group or Vulcan Capital and giving it to Joe Homebuyer in the form of a “rebate check”. In the backrooms they probably likened it to the old gas station price wars, where two gas stations, side-by-side, would keep lowering their prices and selling at a loss until one of the gas stations went out of business. In this case, I think they may have bet on the wrong station.

As we’ve seen with the airlines, price wars result in low profits and often in bankruptcy. Before launching a price war, the initiator must be sure that it can survive a low price longer than the competitors can. The initiator is best positioned to sustain the low price if the lower price is a reflection of a true cost advantage and if competitive products have no perceived advantages. Strategies available to a competitor forced into a price war, other than matching the lower price, include adding perceived value to its product or targeting the nonprice sensitive segment of the market. As Redfin has stated themselves, their service is likely to appeal to the budget or price-sensitive shopper. If that’s the case, then the luxury home market should remain strong and the prime focus of traditional real estate brokerages.

Since Redfin has been most appealing to those who were price-sensitive above all, then of course it follow suit that their business would suffer significantly when the market takes a dip. Their price-sensitive customers and clients are staying away in droves, sitting out an uncertain market.

Redfin “may yet fail”? Loss of sales cause massive employee layoffs

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So we all know how important it is to guard our online reputation. I get most of my business from referral, but I also get inquiries from my website, and I always Google someone first, before I meet them. Employers are now doing the same thing. Say Cheese: 12 Photos That Should Never Have Been Posted Online

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Craigslist in the Seattle/Tacoma area is now asking for real estate brokers to register before being able to post ads on the site. Is this the first step before charging brokers for the ads? It could be that the party will soon be over, as Craig expands his pay ads from New York to other areas of the country. Though I will be very sad, it could be that these ads will become more useful as there are always idiots out there who spam the classifieds with their “No Down Payment” ads over and over again. If you start charging them a few bucks for the ads, they’ll think twice before putting their sometimes bogus, but always lame, no-photo ads online.

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This is just one story in the naked city, but I imagine this kind of thing takes place all over the U.S.. In “Home Free: Foreclosure Crisis Benefits at Least One Group: Renters“, writer Dominic Holden interviews a group of users who quit paying rent and now have lived in their foreclosed home for free for almost a year.

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With a winning bid of just $1.75, a Chicago woman has won an auction for an abandoned home in Saginaw. Joanne Smith, 30, recently was the top bidder for the home during an auction on eBay, The Saginaw News reported. Her bid was one of eight for the home. But before the Open House, the price was $2.50.

And on another note, the Elvis Is Alive Museum that was for sale by ex-real estate broker Bill Beany, is now for sale again on Ebay.

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