I LOVE MAPS,
collaborative maps online to be more specific. Six years ago, I was surprised and thrilled that
Real Estate Bubble Maps our clients
helped create were awarded the "
Best Real Estate Map of 2006," by Platial, one of the original (now defunct)
wikimaps. So when I learned about tonight's presentation on "
The Power of Maps," it reignited dreams of cocreating a variety of maps to empower real estate consumers to
save billions of dollars annually.
It is short notice, but The Real Estate Cafe would like to host an informal TweetUp before or after tonight's discussion, 7-9pm at Design Studio for Social Intervention to brainstorm about using "the Power of Maps" to turbo-charge our blitz marketing campaign for expired & canceled real estate listings.
Why a mapping event? As we blogged recently, more than 20,000 MLS listings EXPired or were CANceled across Massachusetts during 4Q2011. Although potential home buyers CANNOT access those failed listings online through the broker-controlled MLS, individual homeowners could add their properties to collaborative maps designed to EXPedite C2C C2C — consumer to consumer sales — without real estate commissions. That win-win would convert some of the $250 million in lost commissions into consumer savings.
That's just one of our mapping fantasies at The Real Estate Cafe. As the headline of this blog post suggests, we've also got ideas about crowdsourcing pending sales and bidding wars, plus some other SECRET projects. We've already let one of them out of the bag, our Million Dollar Markdowns maps -- think disaster tourism meets real estate; and we've blogged about "creating the opposite of crime maps" in the past, too.
The "Ocean of Love" matrimony map above also reminds us of community maps we've tried to seed in the past on Valentine's Day. If you love using maps to "Challenge the Status Quo or Change the World" (see subsection on page 192 of readings for tonight's discussion), we'd love to TweetUp with fellow Maptivists and other kindred spirits.
If tonight doesn't work for you, would anyone like to TweetUp again tomorrow, tentatively 3:30pm Thursday @VentureCafe in Kendall Square in Cambridge or meet privately? Our goal is to continue brainstorming innovative strategies to revive EXP+CAN listings and deliver millions in consumer savings? If you're a DIY homebuyer, we invite you to download our FREE 10 Step "Insiders Guide" to get started.
When we launched our "FSBOs on Steroids" slideshow
eight years ago, we began with the end in mind: helping real estate consumers
save money by minimizing real estate transaction costs. While other "alternative" real estate brokerages like
Redfin are moving away from that core value, it remains our passion seventeen years after opening as the
first real estate cybercafe in the world.
As
fee-for-service buyer agents, we don't represent sellers; however, we are eager to educate prospective sellers about their options, regardless of whether they want to try selling by owner or
selecting a traditional full-service, full-fee listing agent. So without disparaging their business model, we invite readers to compare the "Guidelines for preparing a home for sale" offered by a
fellow blogger on Local.Boston.com and give thoughtful consideration to your options.
Rather than chosing a single option, we encourage homeowners -- particularly anyone who thinks
real estate agents are overpaid or anyone
lost home equity after the
housing bust -- to consider a five-phase listing strategy. Here's a quick overview:
PHASE 1: Pre-listing phase: Be aware that proactive home buyers may be eager to buy your home "as is" without listing in MLS or reducing your net profit by the broker's fee;
PHASE 2: For sale by owner: Even if you don't list your home in the MLS you can still "syndicated" it across a variety of sites including
Zillow,
ForSaleByOwner.com,
MA4SaleByOwner.com, etc, and get help "a la carte" from
fee-for-service real estate consultants like the Real Estate Cafe;
PHASE 3:
Listing Entry Only: Pay a flat fee of approximately $99 to $499 dollars to have your home listed in the MLS, and offer a "traditional" or minimal BOYB (bring your own broker) coop fee to any real estate agent who represents a buyer;
PHASE 4: Select a traditional listing agent based on our
Listing Agent Report Card with a reduced real estate commission because you've already created and partially implemented a marketing compaign that might include a virtual open house, video, etc. (see options offered by
FSBOSherpa.com and other vendors); and finally
PHASE 5: If the property fails to sell during a specified time frame, let your listing contract expire; drop your price by the amount of the commission and still
net the same profit as a for-sale-by-owner, again.
Our recollection (
pending fact check) is that a study by the California Assocation of Realtors (CAR) revealed that 70% of first time home sellers CONSIDER selling "for sale by owner." If you're open to that possibility yourself, The Real Estate Cafe is eager to go over the options above in more detail in person, individually or in a small group.
Watch this innovative new site for our next FREE FSBOs seminar, or schedule an appointment using the link below and will email you a sample screencast!
Readers of this blog may recognize that the lead story today in today's Boston Globe -- Home of the housing bust: Central Mass. towns reel; no recovery in sight -- reflects ongoing research The Real Estate Cafe has been doing regarding expired and canceled listings across Massachusetts. During 4Q2011, there were more than 20,000 expired and canceled real estate listings statewide. Those failed MLS listings represent an estimated $250 million dollars in lost commissions to real estate agents -- that's right, a quarter of a billion dollars in one state, during one quarter alone!!!
From our perspective as consumer advocates, a portion of those lost fees could be converted into consumers savings for both DIY home buyers and sellers.
As housing advocates and others have preached, a crisis is a terrible thing to waste. Our goal is to help turn those 20,000+ failed listings into a win-win-win opportunity, for sellers, home buyers, and local communities like those described in the Globe article. We're eager to find out if any of the high-credibility sources in the article -- Tim Davis, Barry Bluestone or any of affordable housing advocates -- are involved in any ongoing responses to the problem or organizing anything new, and how we might collaborate with them.
- OUR GUESS is that real estate investors will be the first respond to the "give away" housing prices that some Boston Globe readers say exaggerate the magnitude of the problem.
- OUR BELIEF is that the conventional real estate industry is not offering enough options to homeowners, particularly those who may be forced to try selling "for sale by owner" because they cannot afford traditional full-service, full-fee listing agents (watch this 3 minute video).
- OUR HOPE is to collaborate with others, including investors, who are already organizing or would like to explore alternative solutions that drive sales to achieve housing goals or some other social good.
At this point, we're sharing our proposal privately with real estate and technology innovators who are ready to "think outside the box." If you're one of them, or if you own an expired or canceled listing anywhere in Massachusetts, or if you're a DIY home buyer or renter interested in a win-win-win opportunity, we'd like to hear from you. In the meantime, we invite you to share this blog post or our Twitter post above with your social network and download our "Insider's Guide to Approaching Owners of Expired & Canceled Listings."
PS. Earlier today, we were surprised to find that the Globe headline story was NOT one of the most frequently shared by email. Our initial thought was maybe the housing bubble is old news. Five hours later, the story had been shared on various forms of social media over 400 times and generated over 200 comments. That confirming that the crisis represents an opportunity to win-win-win solutions. Want to join us in that quest?
Yesterday, we blogged about the eye-popping phenomena of Million Dollar Markdowns across Massachusetts. Today, Valentine's Day 2012, we're turning our attention to another controversial subject -- love and betrayal in the luxury home market.
We didn't set out to expose conflicts of interest in the sales over $1 million, but when we recently prepared a "Listing Agent Report Card" a surprising finding jumped off the page: some of the best known luxury listing agents in Greater Boston routinely operate with a conflict of interest, either through in-house sales or dual agency.
Looking at single family homes sold over $900,000 in one community, we were stunned to discover that 70% of one well-known listing agent's sales were in-house; and in more than one in four sales, the MLS listed her as both listing agent and sales agent. Does that mean she represented both buyer and seller -- an obvious conflict of interest -- or did one in four luxury homebuyers forgo their right to an exclusive buyer agent without a conflict of interest?
When our "Dual Agency Detective" analyzed sales of another leading luxury listing agency, we found the broker-owner "double dipped" on nearly one in five transactions during 2011. Was that conflict of interest disclosed to both buyer and seller so they could give "informed consent" on state mandated forms, or are luxury home buyers effectively denied their right to an independent advocate (and a 100% commission rebate in they work with The Real Estate Cafe)?
We're not going to name names in this short blog post, but we have preliminary evidence that suggests that state requirements regarding disclosure are not being met.
Conflict of Interest: What conflict of interest?
Regrettably, surveys show that majority of agents don't see anything wrong with dual agency, but consumer advocates agree that home buyers and sellers should "never agree to dual agency. Why should luxury home buyers, in particular, be concerned about dual agency? First, the stakes are higher; and second, high-end homebuyers place a premium on privacy and trustworthy advisors. As Inman News, a leading real estate news service, reported today:
Critics of dual agency say buyers and sellers are in the strongest negotiating position when they are represented by an experienced broker or agent who is an advocate for their interests.
Not only is it impossible for one agent to represent the interests of both the buyer and seller in the same transaction, critics say, but a "dual agent" may reveal information that undermines the negotiating position of one or both clients.
If real estate agents are not complying with laws to protect home buyers and sellers, be proactive! Ask YOUR prospective agent if they will pledge their undivided loyalty to you using this form, not because it's Valentine's Day, but because you have a legal right to receive that level of service! (Download the consumer brochure below prepared three decades ago by industry regulators for more information about your rights.)
Friends Don't Let Friends Use Dual Agents
Before you go house hunting, regardless of whether you're looking over $3M or under $300K, please ask our "Dual Agency Detective" to do a background check to see if your friend or agents you'd like to interview have a history of in-house sales and / or "double dipping."
If they refuse to sign this form or incorporate the language into your buyer agency agreement, we'd be glad to represent you and rebate 100% of the buyer agency fee to you (see article in Wall Street Journal). As reported yesterday, two of our clients have received rebates over $85,000; one saved nearly $1 million off the original asking price and the other saved approximately $4 million.
For about a decade, The Real Estate Cafe has tracked "Million Dollar Markdowns" on luxury homes across Massachusetts, particularly Greater Boston. After the stock market stumbled on September 26, 2008, we began to convert our research into secret maps and "walking tours" that we still share selectively with clients and their financial advisors. This year, we're eager to customize our "Sweetest Deals" research for a select group of DIY luxury home buyers and / or their personal financial advisors.
Recent headlines report that housing prices have fallen back to 2003 prices. We haven't dissected the MLS data yet, but our guess, is that is not the case with luxury listings in MA, even though sales of single family homes over $1.85 million fell from 358 in 2005 to 300 in 2011 -- a 16% drop!
Sample research: Sweetest Deals of 2003
Our research a decade ago included an analysis of price reductions on luxury homes in the 25 most expensive cities and towns in Massachusetts (based on Boston Business Journal research at the time.) We'll decide which towns to blog about next based on who contacts us. In the meantime, can we offer you a sample or "taste test" of past research as a Valentine's Day present?
When The Real Estate Cafe opened in 1995, we were the first real estate cyber cafe in the world. Equally radical, then and now, is our "Menu of Fees & Rebates" which rebates up to 100% the buyer agency commission built into MLS listings (see article in the Wall Street Journal).
Seventeen years later, I did not expect to be attending a financial literacy class, for the 3rd time trying to strengthen financial muscles and sustain a business model that is based on the belief that "the best way to become rich is to enrich others."
Ten days ago, I heard a leading housing economist at MIT (and former professor of mine 30 years ago), say, "The Best time to buy in Boston was last year." Ironically, 2011 was The Real Estate Cafe's worst billing year ever, but one of our BEST years for new product development ideas based on the real estate business model of the future.
God wiling, our goal for 2012 is to collaborate with others to move our innovative ideas into the marketplace! As a virtual brokerage, are operating expenses are tiny compared to our bloated, brick & mortar competitors who's business models are increasingly obsolete. That's why one real estate thought leader says that "Small is beautiful" again in real estate.
Yes, small overhead expenses are beautiful for us and our do-it-yourself clients as well. Like other critics, I think the book Four Hour Work Week can prey on people's desire to become rich quick, without really trying -- two deadly sins, greed and sloth. But ironically, when our DIY clients select our highest hourly rate because they don't need much help, it only takes us four hours per week to break even (see footnote). We don't want or need to overcharge clients if they're willing to pay as they go. That's why we offer clients the option to get back 100% of the real estate commission back, as well as options to "buy down our hourly fee" from $150 per hour to half that -- $75.
To celebrate Valentine's Day 2012, we're reactivateing our "business sucks sale" to get $2,000 in the door quickly to take care of immediate cash flow needs. We understand that prepaying for real estate services may still be a radical concept to real estate consumers, particularly when larger buyer agency firms -- like Redfin, ZipRealty, and CondoDomain -- are abandoning or reducing their rebate models.
But we're still committed to "making others rich" by rebating up to 100% of our commission.
- What's the best way for us to communicate the amazing return on investment our rebates give DIY homebuyers in exchange for paying for services "a la carte"?
- Would you believe our most recent rebate was nearly a 10 to 1 return and our record rebate is over $100,000?
We're particularly interested in reaching couples who are newly engaged or newly married, and would like to get their feedback on a new rebate model that would allow their families to pay for our services and give the rebate as a wedding gift. In the meantime, we invite everyone do download this FREE guide as an example of our unconventional, consumer-centric, money-saving approach to real estate.
Footnote: Breakeven calculation based on our "survival budget" which does not include many one time costs or quarterly payments, savings for retirement, repayment of outstanding debt, etc.
After waiting out the housing bubble, we're glad to see some of our past clients beginning to look again at the housing market. Hard to believe when The Real Estate Cafe opened in 1995, we were the first real estate cyber cafe in the world to offer public access to the MLS via self-service computers in our 1,200 square foot storefront. Seventeen years later, our money-saving fee-for-service buyer brokerage operates virtually and gives our DIY home buyers a "Menu of MLS access options" in addition to the industry's most generous Menu of Rebates.
Using public tax records and a variety of other data bases related to lifestyle, our first option allows buyers to search ALL of the residential units in a neighborhood, regardless of whether they are for sale or not. We refer to it as our "100% inventory" option and teach clients how to use "PROACTIVE house hunting" strategies to identify home buying opportunities, in some cases before they are listed on MLS, based their dream search profile.
Our second MLS access option below is also very powerful. In fact, they are so well regarded that http://Zillow.com purchased them last Fall. They've just released some new functionality and we're glad to do a table top demo to help you use this option most effectively. In the meantime, we encourage you to try their search by price reduction and invite your feedback.
We still encourage our past clients to use our original MLS access system, in addition to one or both of the other options, because it's the only one that enables users to get information on expired and canceled listings. We've blogged extensively and encourage our clients to download our 10 step, "Insider's Guide to Approaching Owners of Expired & Canceled Listings." to pursue this win-win money-saving opportunity.
Regardless of whether you're a new or existing client, we can upgrade your MLS search criteria to email daily updates of expired and canceled listings that match your search criteria. To get started, download our Insider's Guide using the button below.
Wow, GJEL, the half-dozen points you make in your series of comments on Boston.com's real estate blog post, Expired and cancelled listing and the winter market, are so revealing:
This article could not be more timely for me as a seller as [1] my listing expired and have begun to explore alternatives to the traditional realtor relationship. My property is located in a different state and I just had a discussion on Trulia in which I asked listing brokers some of the [2] questions posted about contingency compensation and the flaws of the model. I [3] advocated for a flat fee service arrangement and was universally MOCKED. [4] I suggested that homes wouldn't be so overpriced if sellers could reduce their selling cost and improved their net. This should benefit all if the reduced asking price moves inventory.
As mentioned I think the most important aspect is seller motivation. In my case I am not a motivated seller and in fact listed with a broker to get buyer feedback. I set my home price at the high end of the range because it is in the sweet spot of the market. I have no mortgage and other expenses are modest. I had two offers both from a realtor who wished to buy for his primary residence. Although I declined his offers, this was good feedback for me. [5] I now thinking of a flat fee arrangement with MLS listing and offering only a buyers broker commission. I will reduce the asking price by the amount of commission saved.
Someone asked why someone would list a home that they don't need to sell. The reason is that we want to [6] buy another property if we can get our price or I should say NET.
Contrary to what real estate agents may say, from the seller's perspective, the bottomline is the NET PROFIT after they deduct real estate commissions. As you point out, if there are no full-service, full-fee brokers involved, any seller can reduce their price and sell, netting the profit. That's why we liken this win-win opportunity to a tax-free holiday, get the photo above ;-) In your case, that translates to "reducing the asking price by the amount of commission saved," based on whether one agent (a buyer agent) or two is involved so you can buy another home.
DIY homebuyers are you paying attention? Do the math -- if DIY sellers are willing to reduce their sales price by the amount of the real estate commission, why use a full-fee buyer agent, either? And read buyer agency contracts carefully before signing! Even well-known real estate rebate provider Redfin doesn't represent buyers in for sale by owner transactions and their minimum fees is $6,000 (or $2,500 with a partner agent). If you request a limited amount of help from fee-for-service real estate consultant like The Real Estate Cafe, you can pay for the services you need "a la carte," thereby minimizing the price the seller is willing to accept and maximize your savings!
So you're right, GJEL! The contingency compensation model -- the traditional, two-sided real estate commission -- is not only flawed, it's one of the long overdue reforms that could create BILLIONS in savings annually for real estate consumers! Real estate agents know it, and that's why they MOCKED you on Trulia. But in this year of "Customer Activism," shaming can't hide barriers to competition (see our previous blog posts and Google search results) when alternative solutions are a click away.
DIY home buyers: Want to learn how you can save money by approaching DIY sellers and for sale by owner properties (FSBOs) directly? Click on the button below and to download our FREE, no obligation "Insider's Guide to Approaching Owners of Expired & Canceled Listings."
WOW! Near record temperatures in January! Will 2012 be the year the housing market thaws in Boston? Are we dreaming? Home buyers, particularly anyone who has been waiting for housing prices to bottom out, let us know what you see coming in 2012 & beyond (click for survey)
For historical context, compare today's winter thaw in the video above to the deep freeze portrayed in our blog post on January 4, 2008 entitled:
Thousands of MLS page views over 2 to 4 years: Will Bubble-wary buyers extend wait thru 2008?
Keeping an eye on the real estate market in Massachusetts? The
Real Estate Cafe and
BostonBubble.com would like to know what you think housing prices will look like in Greater Boston, as well as LOCAL cities and towns across the state, in 2012 and beyond.
Click here to take survey, and share this survey with other home buyers!