Looking Out From the Garage: July 2008

Yep, it's on Speed TV. Link to the show...

Alonzo Bodden from Last Comic Standing is hosting the show. 

Basically, Alonzo is running through a group of interesting cars, whether they are cool, or the antithesis of cool.  From the Citroen 2CV (1948-1990) to the 2006 Mitsubishi Lancer EVO.  BTW, the 2CV originally had 9 (nine) horsepower... my MOWER has more than 9HP.  The EVO has 286 HP. 

The cars are pretty slick... or just pretty... or make slicks.  English cars, French cars, American cars and Italian cars.  There are some great anecdotes and interesting stats about the cars. 

Even if you aren't into cars, there is a lot of great material here.  Some of these are recent, and some go back quite a way.  Some are amazingly rare, but others could be picked up over the weekend on EBay. 

Just sitting here listening to the Neal Boortz show and I heard something that surprised me.  Belinda (Neal's producer, and one of the people that keeps him in line) had something very bad happen to her son at the airport on the escalator.  While riding up it, his foot was sucked into the side and trapped.  He will recover, but is having to undergo multiple surguries to fix the damage to his foot.  The further mentioned that there have been several incidents with kids just in the last couple of weeks at Hartsfield-Jackson Airport. 

That kind of struck me, so I Googled Crocs and escalators. 

The news isn't good...  Consumer Reports, on their blog, has a story from May 20th about the dangers of Crocs on escalators.  What shocked me even more was that CBS News had a story about this almost a year ago.

Right now (literally as I write this) there is an escalator out of service at Hartsfield because of a similar incident this morning. 

It isn't just airports, either, but shopping centers and other places with escalators.

I just finished catching up on my feed reader... and I was WAY behind.  Behind enough that I am just getting to the Housing Rumble on US News & World Report.  Actually, I came to it from seeing Jay Thompson's posts on his PhoenixRealEstateGuy blog. 

I think Jay is a great guy.  And he is a fantastic real estate agent.  But, there is a problem debating about FSBOs on most websites... no matter HOW good your case, there are so many people that just want to pile on and kick the agent that it is almost impossible to win.  But, since I am a glutton for punishment, and have several posts to draw on that are right up this line, I'm going to stab at it. 

I'd especially love to get comments from people that DON'T agree with my positions.

Now, the question was: Do you need a real estate agent to sell your home? 

To start with, the answer is No.

The key to that is the word need...  You should want an agent, because it makes good business sense, but not need....

So, the rest of this is going to disagree with the pro-FSBO position as outlined in this series from USN&WR. 

Let's start with the numbers... 

Take a look at this post for a little more on that.  Here is the quick version...

• The "6% commission" referred to in the post is usually only 3%, since every FBSO with  sense is offering to "protect" brokers that bring a buyer.  So, the $18k he is talking about is now $9k... 
  
• The company that Healy works for charges at least $699 for a package that includes MLS listing... which is a necessity if the seller actually wants to sell.  Despite his talk of all of the hits on their site, the places that buyers are looking are places that have the most listings... and the most listings are coming from the MLS.  So, now we have barely over $8k...
• Now, on the $899 package, you can get the video tour... ok, you can upload a video tour.  But you still have to pay for it.  And don't forget a virtual tour.  Expect to drop between $300 and $800 for a GOOD virtual tour and video tour.  Now having that agent is costing around $7500.
• Staging consultation?  $300-500...  $7000.
  
• And now you need to advertise.  Expect to spend a couple hundred dollars a month on advertising and marketing.  $5500. 
  

Of course, if you want to go over the top and stand out from the crowd, you will spend more.  And the money you spend ($3500 in this case) is gone.  If the property doesn't sell in 6 months, you get to start over.  That is the part that strikes home.  Your agent is taking the risk.  They are spending THEIR money and only make it back if they are successful.  So, to say that Healy overstated his case would be pretty accurate...

Let's talk about those studies he quoted...

The studies that Healy is mentioning are from Northwestern University and Stanford.  And frankly, while they do support Healy's points on their face, they don't hold up to a real examination.  First we'll talk about NWU...

Please note that this study was given to the NY Times, but not to any peer reviewed journals.  There are some very good reasons for that, and they are right in the study.  Here is a quote from the study:

The FSBO (pronounced FIZZ-bo) sales results were adjusted for timing, for house and lot size and characteristics, and for neighborhoods to make them comparable with sales by agents. They were also adjusted for what the researchers came to believe is an extra bit of shrewdness that FSBO sellers possess. (emphasis added by me)

Exactly what is the adjustment for shrewdness?  And then back up a little to adjust for neighborhood... think that was fudgable? 

The final issue with the study is the reporting of the prices.  In the case of the agent based sales, the data is from the MLS.  Agents are required to report the sales price as well as any seller paid items such as closing costs or points, etc.  For FSBOs, they self-reported.  And as those of us in the business know, people (buyers and sellers) generally fail to remember the net price, and focus on "the big number."  So, without independent verification of the prices, we don't really have an accurate picture. 

Finally, this study was done in an area with a very popular FSBO market, and during a very strong market period.  During strong markets, getting the word out about a property is easier, and selling isn't as much of a challenge. 

What they didn't address in the study is how many of the FSBOs sold v. agent represented properties.  They do mention that agent represented properties sold fast that unrepresented properties.

Now we should talk about Stanford's study...

That study focused on properties that are on the campus at Stanford.  This is a pool of 800 homes that can only be purchased by faculty and senior staff.  As such, even the brokered transactions aren't subject to or influenced by the MLS.  In fact, the homes sell for almost whatever is asked, as there is a waiting list.  Because of these facts, and the fact that the seller is much more likely to be able to find a buyer on his or her own, there is no advantage to using an agent...

So, dispensing with those studies is easy enough...

What else should we know?

Well, the largest chunk of FSBOs that close are sold to family, friends and neighbors.  Did you catch that... the seller and the buyer already know each other.  And usually, by the time the seller gets around to calling the agent they have already exhausted those options.  And the last study that I saw (sorry, don't have it handy) was showing that only about 14% of FSBOs sold before being listed with an agent.  At the same time, 60% of agent represented homes were selling (hot market...).  So, FSBOs only had about a 1 in 4 chance of selling their home, and likely to someone they already knew. 

Kind of sucks the wind out of his sails, no?

And finally, remember that the FSBO marketers get paid whether the home sells or not.  In fact, they know that 86% of the homes aren't going to sell after they cash the check... but that is ok.

While preparing for my new blog (snicker, snicker... teasing it now) I ran across an interesting PDF. 

Lilburn, GA commissioned a real estate analysis to look at ways to revitalize the city.  Some of the recommendations have already been undertaken.  In fact, the family went wandering on one of the new walking trails across from the recently upgraded park, playground and city complex. 

So, diving in to the plan (69 pages!) there are some pretty cool things to learn.  These would be especially good for entreprenuers and prospective shop owners, as well as developers and property investors.  While looking over the current business propfiles, RCLCO (the company that performed the study) also showed which types of businesses were needed or desired to best suit the direction the City of Lilburn wishes to go. 

Specifically, in downtown Lilburn (Old Town Lilburn) the city would like to keep going in the direction of the small shops and local services.  Currently there are several antique shops, and what seems to be missing is a local coffee house.  They also see a need for restaurants and perhaps a local pizza place. 

On a larger scale, there is a need for residential development and perhaps some more infill close to town (walking distance).  There is also the possibility of a rail station (if there is a link between Atlanta and Athens via light rail, look for a station in Lilburn... GREAT opportunity if that happens). 

For people considering a move to the area, it is nice to know the future plans of the city, and how those could affect property value and demographics.  Overall, I like the direction that the city wants to take.  Of course, the execution is the important part.  So far, I have been on one of the new greenways, the Camp Creek Greenway.  It is very nice.  I am going to have to check to see how the development of the other greenways is coming along.  Also, the city Park and recreation area is very nice. 

It is obvious that the City of Lilburn is taking these improvements very seriously.  That is a great sign... and clue that it might be a good time to look at Lilburn for a business or investment opportunity.

Mommy...

Something struck me today.  And then it just seemed so natural.  the more I turn it over, the move applicable it is...  Mommies are the ultimate hyper-local experts. 

I am a very lucky Dad.  Because of my job, I get to spend a lot of time with my kids.  With the older one (a whopping 4 years old), we get to go ice skating and to the park and to area attractions.  He has gone to the office and he has "helped" me work in a variety of ways. 

I know his moods, and can identify most of the tip-offs that a good or bad one is on the way.  But not like Mommy...

And then there is the 4 1/2 month old...  I'm lost.  Mommy knows what is going on by his particular cry.  She knows which smiles are poop, and which ones are gas.  There is nothing that happens with him that she doesn't have the inside track on...

Talk about hyper-local...

We aren't talking about a region, state, city, ZIP code or even a subdivision... we are talking about an expert that knows EVERYTHING about just two people.  The Doctor's chart can't cover what Mommy knows.  Daddy knowledge isn't as wide or as deep.  Even Granny insights place behind the Mommy Expertise. 

So, why does it matter?

When one of these little boys is sick, the doctor NEEDS to talk to Mommy.  Sure, Dad can shed some insight... but the expert is Mommy. 

Let's think about real estate...

You knew it was coming if you've read me before.  I always seem to find ways these relate to real estate.  This time is no different, although I think I have already left a pretty good map...

But, the biggest point is that even the doctor needs to know the information that the mommy has...  Mommy is the ultimate area expert on those kids, and nothing happens that gets past her.  If you are buying or selling a home, you need to have the person that knows more about your home and area than anyone else.  You need the expert... the person that is connected to the community.  The reference. 

And yes, Daddies can be the Mommy...

I know I just built up a bunch or goodwill with the mommies... and now I'm going to erode some of it.  Being the Mommy isn't just a biological thing... it is a state of mind.  It is a quest for knowledge and insight.  It is both a path and destination. 

On garage homes in Gwinnett County... I am the Mommy.  ;^ )

Let's hammer on the NAR some more. 

All real estate is local

The NAR has been pounding this message in response to the perceived unfairness of media reporting.  And while there is a case to be made that the media isn't presenting a balanced picture, I don't know if the current campaign is the answer...

And here is why...

There IS a national real estate market.  Sure, you can't move a house from one place to another... ok, seldom can you... but, that isn't how the market is defined. 

When "the stock market" moves one way or another, it is the aggregation of a bunch of stocks.  Depending on which index you are looking at, it may be dozens, hundreds or thousands of stocks.  And those stocks (and the others lumped in with them) may very well be moving in a different direction from any or all of the indicies. 

And yet...

We don't see a cry from the companies involved that each time CNN says that the Dow declined 50 points that they add "but to find out about stocks you may be interested in, please consult a professional stock broker."  And, it isn't like most people assume that if "the market" is down that all of the stocks in the market are down... just like real estate. 

So, while it is true, whining about it probably doesn't help...

Especially from the NAR.  On the way up, their numbers and spin were basically honest.  On the way down, the spin seemed too self-serving.  So, now when the NAR speaks, EVERYONE throws salt over their shoulder and engages the BS filter. 

Instead, say "it is what it is", stop whining and acknowledge reality... all of the realities.  "The national market looks like it is coming off of a bloodbath, but the damage has primarily been in ___."

But what do I know?

At RE Bar Camp, I asked a question... and it turned into one of the break-out sessions. 

This all came from a question that John Novak asked me in the comments, here...

Hi Lane - I won't be at Inman, but would love to find out if there is a consensus as to what the 5-7 sites are where real estate professionals absolutely must have a presence. I'm thinking ActiveRain, a branded outside blog, Trulia, Zillow, LinkedIn, Facebook, Flickr, and Twitter ... oops, that's eight!

So... as I sat there in the morning, I decided to volunteer to ask the question to some folks that are smarter than I...  Pat Kitano, Jeff Turner and Teresa Boardman.  This was before the session started.  Three sites popped out imediately: LinkedIn, FaceBook and Twitter.  My impromptu advisory board all agreed those were the basic sites.  Next up, Jeff and Teresa agreed on Flickr, and Pat didn't stop them. 

So, off to moderate the VERY open discussion. 

I had some very capable participants in the session.  After getting a list together of sites that the audience was familiar with, I immediatey turned to Jeff Turner to talk about Flickr.  We actually talked about Flickr for quite a while.  Teresa provided GREAT examples of how she has used Flickr in her business.  We also talked about how to use Flickr to enhance the other sites and our visitors experience. 

LinkedIn and FaceBook didn't require much discussion... everyone liked them and determined that they were on the list with Flickr. 

Twitter was an interesting, if short discussion.  Pat liked that one could jump in and out, but also loved the way it (and some of the sites that syndicate feeds to it) could be used to broadcast information and announce blog posts, etc.  Teresa and Jeff are also fans.  Most of the participants seemed to like the capabilities Twitter offered.  It gets to stay on the list. 

The fifth component was the local connection.  It is vital that we talk with our local folks.  And, aside from TwitterLocal, the sites so far aren't getting us that hyper-local connection.  And... as I have been expounding, as well as many of the Inman Connect speakers did as well, Hyper-Local is where the action is at. 

Teresa Boadman again inspired us with the way she has managed to use sites like Flickr and others to find people with similar interests to get together in real life... and it is delivering business.  At this point I wish I had the names of everyone that participated because the discussion was excellent. 

Finally, we discussed Active|Rain and Localism.  There was a split here.  On one hand, A|R is seen as a MUST have SN site.  On the other, it is best for agent/agent communications... not agent/consumer communications.  Localism on the other hand is a VERY powerful engine for hyper-local content.  For the purpose of getting business to the closing table, A|R (not including Localism) is only marginally valuable. 

Now, the value of A|R is really in the knowledge base of the membership.  As such, I would say it is a place where most of us should hang out. 

But for business, Localism is worth inclusion on the list.

We can't always loaf or watch racing (different things, BTW).  So, Sunday is a good day for Lawn Maintenance... and here are the cool videos. 

Live from San Francisco is a compilation of tweets (communications on Twitter) for the day posted.  I was going to post up all of the tweets into daily posts... but it even bored me. 

What can I say... you can see the week is pretty slim... Sorry about the lack of posting...

Back from Inman Connect in San Francisco, I took Garrett to watch some model trains.  Small is the new Big... in trains, too.  It was really cool...  He had a ball, and LOVED watching the trains run. 

I will be back up to speed for next week...

There is a race that has always intrigued me.  It used to be quite common for drivers to race roads up hills... Hillclimbs.  There are very few of these left, and the Grand Daddy of them all is the Race to the Clouds... racing up to Pike's Peak in Colorado.  Only the Indy 500 has been run longer.  I grabbed a couple of videos to frame the event.

After getting contacts from several people I hadn't heard from in a VERY long time, I started thinking about Social Networking media.  I decided I needed to update my strategy... and do The Great Social Media Experiment...

There is a quote that I love, and I started to think about the deeper meaning.  Men don't cook, they grill.  And it isn't just about the food... but about the rest of the meal.  And besides, cooking with fire is more dangerous.   

Welcome to the Tuscany.  The property blog for 955 Juniper, Unit 2324 at The Tuscany was ready for public consumption.  So... I said so. 

There are a lot of people that see the commercials and have no idea how a "lead aggregation company" works.  So, I thought I would take a few moments and explain it.  I tried to be fair... I'm not a fan.  So how do JustListed and HouseValues work?

There are a lot of different business models for real estate companies... and there are a wide variety of "need sets" for consumers.  WhatIf? A different way to sell property... explains a bit about a discount model that I offer to clients for whom it is appropriate. 

Jason Sardi, here on Active|Rain is a pretty good writer... and I just thought it easier to let him explain his position (which was spot on, in my opinion...).  From the mind of Sardi...

What?  Only 6 posts this week? 

Yep... I'm a slacker. 

And it all started with Drifting off on a Sunday...  You know.  I just couldn't help it.  I was thinking about how much fun it is to drift... off.  And the next thing I knew there were videos. 

On July 7th I posted on my "other blog" the news that I had moved to Diamond Dwellings.  And it has been a BUSY 2 1/2 weeks since then.  The news had been hinted at and teased, so Finally! And the winner is...

Lots, and I really mean LOTS of consumers want to know if this is really the time to buy, update, or sit tight.  And despite the constant droning of the NAR and their "Now is the time to buy" campaign, it isn't the same for everyone.  So, should you Add on or get out?

I seem to like to work out in the open.  And, when we finally started putting together the site for a condo in The Tuscany, I did that out in the open as well.  Building a property site... is the post announcing the sneak peak. 

Because I was a customer of Atlanta Dwellings TV (Now ReelDwellings.tv) before coming to Diamond Dwellings, I took part in a video promo that they did for an announcement.  Afterwards, I was able to grab lunch with Doug Hurst from SoftRealty IDX and Matt Fagioli of Diamond Dwellings.  We spoke on Property Searches and Cool toys...

Just about anyone that knows me knows that I love to tell a story.  It comes from my dad.  He didn't just "tell me something"... he had to tell a story.  Telling a story with a point was a hallmark of my dad.  I seem to do it a lot with my blog.