Archive for May, 2009
Here’s an ad I ran across today on Craigslist entitled “Local Realtors Needed To Input Flat Fee Listing Into The MLS”
Hello, we are currently in need of a Realtor in your area to input flat fee listing into the MLS. You must be a licensed Realtor with access to the MLS. You must also obtain permission from your Broker In Charge to work w/flat fee listings. Pays $100 for basic listings and $200 per listing for very limited representation. Listings are for a 1 year term.
Please go to http://www.salebyownermls.net/realtor-join.htm
A regional recruiter will contact you afterwards.
How does this work? What does the contract the seller has with the brokerage say about agency? How can an agent who has never been to the house properly represent the Seller of the house?
What about liability? If something goes sideways, the agent who inputted the listing in that particular jurisdiction would be held responsible. Most Errors & Ommissions policies have a $5000 deductable. So for $100, they may have to make up this deductable amount out of their own pockets. How could this possibly be worth it for any agent or brokerage, unless they’re not in it for the long-haul and they don’t expect to be in business much longer.
This seems to me to be an abuse of the system on so many levels, not to mention, a pretty stupid thing for an agent or brokerage to consider doing.
Though real estate sales are down nation-wide, Condo Domain announced they’re expanding into several markets, Seattle included. Most real estate firms across the country are struggling. Zip Realty has yet to make a profit. Redfin hasn’t shown a profit either and has had to raise their prices, while quietly eliminating the listing agent contact info that they originally had on their site.
Another Seattle discount/rebate company Findwell has purchased a cute name, has a cute little logo’d car (think bankrupt real estate firm Foxton’s) and has both a static and a map search, but only made about 19 sales since they’ve started (Seattle Business Journal) and 10 sales total in 2009. The average sales price was around $400K and based on a 3% sales commission, they’ve netted about $60K so far in 2009. They have 6 agents and brokers listed on their roster, so that’s about $10K per agent for the first 5 months of 2009, and that’s before taxes and marketing expenses.
In the big wide world, there will always be desperation and individuals willing to undercut the competition, cross picket lines, become scab labor and participate in buy-downs, kickbacks and pay-outs, no matter what the business.
The Condo Domain expansion coincides with their announcement that their prior business plan of refunding all but $5000 of the commission wasn’t making any money, so they’re moving to an a la carte plan where you only get that if you don’t need to tour more than 3 properties. They’ve found that in their business the average buyer tours 14 condo’s before buying, so in that case, they’ll refund 20%, similar to Zip & Redfin. But again, none of those companies are making a profit. They are essentially giving away their profit to the buyer in order to capture the buyers business, and they’re betting they can capture enough market share before the money runs out.
Interestingly enough, Condo Domain seems to be expanding after making only 33 sales. (33 sales! Condo Domain White Paper) This reminds me of Buyside Realty, the discount firm that tried to launch an IPO with a million dollar loss. They have since gone out of business.
Perhaps that fabled “6%”, spread out over all of the sales, from $200K condo’s to $2M luxury homes, when that amount is averaged out, that percentage miraculously equals the amount of money it costs to run a real estate business. Maybe, just maybe, owners of brokerages have actually looked at the books, consulted with accountants, tabulated results, crunched some numbers, and came up with this simple formula that will allow them to stay in business. Could be. Just sayin’.
GIS Virtual has just the solution for those too cheap or too broke to stage their listings. They are a digital visualization company that will virtually “stage” your listing with computer-generated drawings and animations. It looks good on the interweb. Of course, buyers may be a little disappointed when they show up to see the beautiful home that now shows vacant.
The Great Wish across America is to resume the life of comfort-and-convenience that seemed so nirvana-like just a few short years ago, when the very constellations of the heavens might have been renamed after heroic Atlanta realtors and Connecticut hedge fund warriors, and the boomer portfolios groaned with earnings, and millions of graying corporate salary mules dreamed of their approaching retirement to a satori of golf and Viagra, and the interior decorators grew so rich installing granite countertops that they could buy their own houses in the East Hampton, and every microcephalic parking valet in Las Vegas qualified for a bucket full of Ninja mortgages, and Lloyd Blankfein could dream of divorcing his wife to marry his cappuccino machine.
Clusterfuck Nation by Jim Kunstler
James Howard Kunstler has written for the Atlantic Monthly, Rolling Stone and the New York Times.
Complementing their existing video program, Coldwell Banker recently launched their video channel on YouTube. Since 77% of total U.S. Internet users watch video online and, after watching a video over half move closer to a purchase, they figured that video could be an effective online marketing tool.
So far, all of the videos online are either property videos (of active listings) and Agent videos created through their video program, plus a scattering of “location” videos. For instance, if you search using the map and go to “Seattle”, you’ll find information videos not only about Seattle homes for sale, but of the Pike Place Market and different neighborhoods around the city.