First Impressions- Blind Dating for Homes

Ever go in a blind date? Beforehand, aren’t you just praying that they won’t be unattractive. If they are, most of the next hour will be spent thinking of reasons to leave early. Even if they are a wonderful person- you may never find out.

          

Home owners are going on a blind date when they come to see your home, or at best it’s like interenet dating. They may have seen some pictures and know a little bit about the home, but once they actually show up- none of that matters anymore. And if your home doesn’t look good outside they may never discover how great it is inside- they may just drive away.                       

If a buyers pulls up and thinks the home looks bad they know all of their friends will think the same when they come over to visit. We all want to have a home that we’ll be proud of.

When selling a home it’s important to present it well and this begins with the home’s curb appeal. You want the outside appearance to draw them in and make them feel comfortable. You want your home to be a place they would be proud to invite people to.

Some tips to make a good first impresson;

                          

Kill mold and mildew on the house, sidewalks, roof, or driveway.

Stow away unnecessary garden implements and tools.

Clean windows and gutters.

Pressure wash dirty siding and dingy decks.

Edge sidewalks and remove vegetation growing between concrete or bricks.

Mow the lawn. Get rid of weeds.

Rake and dispose of leaves, even if your lot is wooded.

Trim tree limbs that are near or touching the home’s roof.

Make sure your driveway is clean and clear.

Spruce it up with some accent lighting.

If you can budget it, a fresh paint job does wonders for a dingy house. Drive around your town to find color schemes that are appealing.

Install a more attractive front door, maybe something with leaded glass inserts.

If you can’t justify the cost of a new door, consider replacing plain doorknob hardware with something more attractive.

If new hardware is beyond your budget, repaint or stain the door and polish the hardware?

       

 

          

A Start-up Business Lesson- Beginning with the Beginning in Mind

Our parents teach us about doing things right and finishing what we start, business coaches teach us how to plan ahead, school teachers teach us how and why things are done and all of these people teach us to begin new jobs “with the end in mind”. We are taught this because they want us to learn the very valuable lessons of completing tasks and planning ahead for the future. And this is good.

But when starting a new business, one lesson I have learned is that while it is critical to have a solid plan and vision for your company, it is also imperative to think short-term. This is so important because as you are starting out every day seems to be a week crammed into a 24 hour period. There is so much to do every hour and all of these have to be done right now and they have to be done right. And many things need to be in some sort of sequence.

And if you don’t survive the first few months, and make some money quickly the end may come all too soon. Of course, depending on your financial situation, your time frames will vary. If you have $Millions to burn before you make anything than you’re way ahead of me because I don’t.

Our team is scrambling to build the systems and support each other, while at the same time make some money to keep us going. Each step takes effort to get us to the next.

As far as I’m concerned the beginning is the most important part of our company’s success, because right now- it’s all we’ve got…

How Blogging can Revolutionize Real Estate

The real estate industry has been in a constant state of reluctant change for over thirty years. In the 1970’s and 1980’s the brokers had all the power. Agents would be told how they would do their business and where to work and even who they could work with. And the public had to go to a broker to get any information and for help selling their homes or finding a home.

In the nineties the power shifted to the agents. Agents started to go from company to company and brokers were allowed to recruit agents so this created a sort of free agency market for Realtors. Brokers would try to woo the good agents to their company by offering incentives and more agent-friendly policies. The public still needed to contact an agent or a broker to get information, so the agents had the power.

Today the power has shifted to the client, where it belongs. Todays home buyer and seller are more knowledgeable and educated in the process than ever before. Some buyers and sellers are more educated than many Realtors because many Realtors simply have not learned their profession well. Many agents make as much money as they can by doing as little actual work as possible. And hopefully those agents will be removed from the marketplace.

The value of a good Realtor today is more facilitatory. They coordinate the home buying or selling process and give area knowledge and expertise to their clients while protecting them and their best interests. The client can get a lot of information, but there is a difference between information and knowledge. A good buyers agent can inform their client of which areas have a better commute time to downtown and which shopping centerhas the freshest produce or what the basic feel of a neighborhood is. They can organize the information and help their client make good decisions.

A good seller’s agent can help the seller know the market value of their home and what the highest possible sales price most likely is. They assist their clients with showcasing their home or “staging” it so it can sell for top dollar and they market the home to the broadest possible audience.

And a good agent in either agency relationship will help coordiante inspections, disclosures, appraisals, and all the details- all the way through the settlement and closing.

Blogging can play a unique role in the evolution (not revolution) of the real estate industry. Companies and agents who stay in touch with the public and keep the pulse of their market’s needs and wants will undoubtedly be the ones to succeed at the highest possible level.

Blogging is the ultimate form of word of mouth marketing.

Often a company (not only real estate companies) will think they know what their clients need or want but actually be completely wrong. Usually this is because they have not listened to their clients. Many compnies make a habit of telling their clients what they want and trying to position themselves as the expert in areas that do not matter to the client. By utilizing the realm of bolgging a company can discover what their clients actually do need, and more importantly, want. They can listen. They can peek into their clients conversations and have real dialogue with them, resulting in better communication.

Blogging is such a valuable tool for any industry, but especially for one that is client-centric, like real estate. One of the key roles blogging will play in this industry will be it’s ability to help weed-out those agents and companies that continue to think that the most important factor in the transaction is the agent. This will allow greater market share for those of us who believe the most important factor is the client.

Improving Your Credit Score

Credit scores are more important today than ever. This score plays a large part in what interest rate you’ll pay on loans, and whether you’ll even get the loan, and it also effects your insurance rates among other things. A credit score is basically a summary of your credit report and a numerical measurement that reflects your management of credit.

Credit scores range from 300-900. A score above 620 is good, above 700 is very good, and above 750 is great. If your score is below 600 you’ll be paying higher interest for your loans. If your credit is low, there are ways to raise it.

There are three basic principles to follow to raise your credit score.

First, pay your bills on time (or early if possible). When lenders look at your credit they want to see that you pay your bills as agreed. Having on time payments is one of the biggest factors on your score. Occasionally being late should not affect your ability to get new credit, as long as your late payments aren’t too close together and too frequent. If you have a pattern of paying late you’ll be considered a higher risk.

Second, don’t declare bankruptcy, have an automobile repossessed, or have your home foreclosed on. These are the BIG ones. One of these and your credit will go right down the drain so be careful to plan your money.

Third, keep control of how much money you owe, especially on credit cards. It’s good to have credit cards to show a track record, but your score not only looks at if you’re paying your payments on those cards, but if you are “maxed out” on your cards. Lenders like to see that you haven’t spent every dime you don’t have. Plus, if you’re maxed out on cards the chance you’ll pay on time if an emergency comes up is not good. If you have three credit cards and each has a spending limit of $3000 and you only owe $300 on each card, that shows the bank (and is reflected in your credit score) that you can manage your money and you have a safety net if you need it.

It may not be as bad as you think, at least for buying a home. I’ve had clients who had just gone through bankruptcy and we still got them into a house, they just paid higher interest. Plus, it’s actually easier to buy a house than a car (you can’t drive away with a house). Owning a home and paying your mortgage on time is a great way to raise your score.

Follow these guidelines and your score will increase. Make sure you keep your credit report accurate. Periodically check your score with the three credit bureaus and be cautious before closing an existing credit card account because that can hurt your score. If you have an account for a long time and it has no balance that is good. Keep it open.

To get a copy of your credit report, contact the credit bureaus:

Equifax- 800-685-1111 – www.equifax.com

Experian- 800-682-7654- www.experian.com

Trans Union- 800-916-8800- www.tuc.com

Missing Child Alert- Destiny Norton

Destiny Norton, a local 5 year old girl from Salt Lake City, has been missing since about 8:30pm Sunday night after walking out of her family’s front door.

Destiny is described as about 3 feet 6 inches tall, about 45 pounds, with short blond hair that had a green streak in it. She was last seen wearing a black adult-size T-shirt with gray stripes. She has silver caps on her teeth and also goes by the name Annie. Anyone with information about this case is asked to call 801-799-4636. Information may also be sent to www.tipsforcash.com

* The volunteer search headquarters has been set up at an LDS wardhouse at 445 E. Harvard Ave. (1142 South).
* A Web site – www.finddestiny.net – is up and contains the latest information about the search for the 5-year-old.
* A fund has been established under the names Rickey and Rachael Norton at Washington Mutual Bank to help defray the costs of the search and assist the family.
* MeadowGold and The Carole Sund/Carrington Foundation have donated $15,000 as a reward for information leading to Destiny’s recovery.
* Anyone with information about this case is asked to call 801-799-4636. Tips can also be sent to www.tipsforcash.com.

Freshman class of 2006

The Beloit College in Wisconsin puts together a list every year for their faculty to give them a sense of the mindset of that year’s incoming freshmen. The people who are starting college this fall were born in 1984 and here are some of the items that made the list about them;

They have no meaningful recollection of the Reagan Era and do not know he had ever been shot.
Black Monday, 1987 is as insignificant to them as the Great Depression.

They were 9 when the Soviet Union broke apart and they don’t remember the Cold War.

They have never feared a nuclear war.

Their lifetime has always included AIDS.

They have likely never played Pac Man and have never heard of Pong.

The compact disc was introduced when they were 1 year old.

They have always had an answering machine.

They cannot fathom not having a remote control.

Roller-skating has always been in-line.

Jay Leno has always been on the Tonight Show.

They have never seen Larry Bird play.

The Vietnam War is as ancient history to them as World War I, World War II or even the Civil War.

They have no idea that Americans were ever held hostage in Iran.

They don’t know who Mork was or where he was from.

They never heard “Where’s the beef,” “I’d walk a mile for a Camel,” or “de plane, de plane!”

The Titanic was found? They thought we always knew where it was.

Michael Jackson has always been white.

Kansas, Chicago, Boston, America and Alabama are places, not groups.

McDonald’s never came in Styrofoam containers.

There has always been MTV.

For us in the real estate industry these people will be potential home buyers in the next few years. Most of these people do not read the newspaper and all of them are online, many have never had to deal with dial-up.

Where are all the singles?

Money Magazine has listed it’s Best Places To Live for 2006, and tops on the list is Fort Collins, CO, followed by Naperville, IL and Sugarland, Texas. Interestingly, the top ten are all in different states. Representing Utah in the top 100 best towns/cities to live in were Sandy (23), Orem (38), and Layton (41). I remember a few years ago the Places Rated Almanac rated Salt Lake City as the top city in America overall and listed about a dozen Utah cities in the top 100. Ah, those were the days…

Highest average income honors go to Greenwich, CT ($112,493), Cupertino, CA ($110,518) and San Ramon, CA ($109,500), while Bloomington, IN has the highest percentage of singles (58.2%) and the skinniest people, based on body mass index, live in Roseville, CA (24.5) and San Francisco (24.8).

You’ll also find cleanest air, youngest (three Utah cities rank in the top 25), most educated, hottest, and priciest to buy a home among others.

Top Ten Reasons Salt Lake City isn’t Seattle

I was living in San Francisco during the tech boom and it was a total blast. Whether or not you were into technology or cared at all about start-ups or the internet, you could just feel the energy. There was electricity in the air and everyone could feel it. That’s how Seattle seems to be now, too, with all the start ups and tech companies and the energy that’s swirling around in the air.

The Salt Lake area (Wasatch Front) has a ton of potential, and Utah actually was an early adopter state with regards to the internet, with more people per capita online in 2002 than any stat in the nation, so what’s the deal?

Here is my Top Ten list of reasons why the Salt Lake area isn’t more tech:

1. Salt Lake is cheap. And by cheap I mean people will go out of their way to save every penny they can. People sell their own homes, people sell their own cars, yard sales are everywhere (and every day people are going to them), and there are possibly more fast food places in the area than the rest of the universe combined. People are so focused on saving money they miss out on the big opportunities. Stepping over a quarter to pick up a dime…

2. Too many people doing the same things. Being innovative is not the only quality a business needs. There are a lot of things that can contribute to a company having that critical early success, and one of those things is being first to market. In this area noone can be first to market because everyone here is doing every thing.

3. People are doing pieces of things. Instead of putting together a solid business plan, raising capital, recruiting a top notch staff and implementing a well thought out plan, many businesses here are really just a couple guys thinking they have a cool idea so they register a business name and website and open for business. No focus or direction really, just a cool idea.

4. The city doesn’t encourage a start up environment. We have weird liquor laws, even stranger bar/club laws, and a spread-out and sparse nightlife. The culture is not a young, hip, fast-moving tech culture. It’s a family fun, get home early for the kid’s soccer game, work three night’s a week for the church kind of culture. That’s not a bad thing- just one way the area is different.

5. Utah is the youngest state in the nation. You might be thinking, “Younger people are more tech savvy and bring that into the workplace”. You would be right, but also wrong. Young people in general are much more tech savvy and do bring that into the workplace with them, but our youth is in children, and many of the brightest move out of state to chase their tech careers.

6. Too many tract homes. Cookie-cutter homes are everywhere in Utah. Even many of the custom homes aren’t custo, they’re “semi custom”. So people live in these boxes that are the exact same as everyone else’s boxes and that just doesn’t encourage creativity. You can’t think outside the box if you spend your entire life in one.

7. Not enough people. There’s something about being in a highly-populated area that makes people thrive. Maybe it’s a competitivness that develops or a wanting to get ahead, or maybe it’s that with more people come more ideas and it’s just the law of averages and the more people the more chance some will make it. Maybe being stuck in hours of traffic just gives people time to be creative and the road rage gives them the energy to keep thinking.

8. No NFL Football. I don’t really know how this could effect things either way, but Seattle, San Francisco, New York, and Boston all have NFL teams and they seem to be the most techy (that is a real word) cities in the country and I need some filler.

9. Not enough tourist attractions. Most of the VC money is not here and since most of that money goes to regional, if not local, start-ups, we don’t see a lot of it. And because there aren’t enough people flying in to Salt Lake to check out the dinosaur exhibits, we have a harder time meeting these people.

10. Not enough coffee drinkers. The LDS religion frowns on drinking coffee, and much of the population is mormon so there aren’t enough Starbucks- and we all know that that’s where the tech deals are made. Probably has something to do with people who in the tech industry get their brains so wired up on cafeine that they can think of outrageous ideas and then have the energy to actually make those ideas work.

Salt Lake and it’s surrounding areas are beautiful and there are a ton of outdoor activites, incuding the best skiing in the country. Low crime, friendly people, big mountains… but not nearly enough people blogging or conspiring to become the next Google.

How Agency Agreements are Ruining the Real Estate Industry

First, let me start by saying that I believe in agency. I believe in the concept of agency and I believe in it’s place within the real estate industry. I teach the agency classes at the real estate school and have never accepted teachers pay, because I teach agency for one reason only- to teach agency.

Having said that, agency agreements, as they are and as they are used (at least in Utah, Colorado and California where I have been a broker) is hurting the industry and clients as much as they are helping. This is mostly due to the fact that there are too may crappy Realtors out there doing a crappy job.

See, the problem is that many Realtors use these as a ball and chain for their clients. They meet the client, give them their schpill about why they should sign the agency agreement and then stop trying. Sort of similar to how a lot of people try so hard to make a good impression while they are first dating someone they like and then after they get married/committed/engaged they stop trying.

An agent meets a buyer, convinces them to sign an agency agreement, and then feels entitled to a commission whether they do any work for the client or not. The client can get tired of the agent not answering their phone (very common) and not returning their calls (very common) and find another agent, then go out with that new agent and find a home they like and the first agent feels like they should get the commission because they got an agency agreement signed first.

An agent meets a seller and convinces the seller that the best way to sell their home is to “price it right” and put it on the MLS. This is my favorite line used by agents. I’ll have to dedicate an entire post to it later so this one doesn’t go on too long. But, essentially, “price it right” means price it as low as the agent can get the seller to go, and then put the home on the MLS so some other agent can do their work and sell it. This way the listing agent has no marketing expense and no work to do. And then if the seller is unhappy with this “service” they are stuck in this contract, usually for six months.

I wonder why people would have a bad taste for Realtors after this…?

Here’s my solution;

All agency contracts should allow the client to cancel anytime they feel they are not being taken care of. There could be a provision in a listing that states any actual marketing expenses incurred during the listing period will be reimbursed by the seller, but the seller can cancel and find a good agent if the one they got doesn’t do a good job for them. The government tries to keep corporations from having a monopoly so consumers will benefit from competition. But when some schmuck lists a home and for six months no other Realtor can approach that client, help that client, or even talk to that client, there is a six month monopoly happening and often times the seller suffers. And the same goes for buyers working with an agent that does not do their job.

My solution is to let agents earn the business. Sign an agency agreement and represent the client, and know that if you do not represent the client well you will lose out on that business. Isn’t that what agency is really all about? Representing the client? Putting the client first?

There are a lot of really good agents out there and they do represent their clients well and they do earn their business. If agency contracts could be cancelled the bad agents would suffer and the good agents would be able to show more people what it feels like to represented well by a good professional Realtor.

Backyards Get Extreme

Used to be that people wanted some room for a small garden where they could grow tomatoes or maybe a swingset for the kids. Some even thought about room to plant a few fruit trees. Today more people are choosing to turn their backyards into full out waterparks and outdoor living areas. Some want a place where the kids can have fun while under the watchful eye of mom and dad, while others would just rather have the fun of a park without losing their privacy. Here are some of the latest trends;

Rock Your World

Don’t let little things like space get in your way. Go vertical with huge boulders, rock and brick. Shape waterfalls, waterslides and just about anything else you can think of.

Outdoor Kitchens

The kitchen may be the most important room in the house, but it’s also becoming the center of the outdoor living space. Whether part of a patio or bar area, or an all together separate space with a fireplace and ceiling, today’s outdoor kitchens are getting to be as nice (and expensive) as their indoor counterparts.

Pools, Waterfalls, and Water Features

Remember that little four-foot wide blue plastic wading pool you played in as a kid? You could use that to slide down some of today’s waterslides. Fifteen foot waterfalls, rope swings, hot tubs that flow into the pool from five feet above, fiber optic lighting systems, and audio powerhouses that turn your home waterpark into a concert venue.

Make friends with your neighbors and maybe they’ll let you come over without admission.

Making Money vs Earning Money

You’ve probably heard the phrase, “The richer get richer while the poor get poorer” and there’s truth to that. One of the main reasons for this is the education and understanding the rich, or their representatives, have toward money, and more specifically, how to make, and even more important, earn money.

Today’s lesson- there is a difference between making money and earning money.

When I was about twelve I started mowing the lawn of a woman who lived behind us. She paid me $5 to mow and trim her lawn and she’d give me all the lemonade I could drink. And this was actually not even just lemonade, it was freshly squeezed and had a twist of other fruit (usually strawberry or raspberry). She could have paid me with just the lemonade and I would’ve been happy. That would have been a fair trade for me. I didn’t mind mowing her lawn and she didn’t mind making me lemonade. She offered me the lemonade as a bonus and so I sipped it up and then took my money as payment.

Most people have that same mentality. They go to their job and they work hard day after day after day. When they receive their pay they are happy. Sure, most everyone wishes they had more, but as long as they feel like they are making a fair wage and they have enough to pay the bills they are content to keep doing what they are doing. At least to the extent they don’t change their habits.

Two friends, Ben and Jim, both get a job at the local grocery. Ben takes $100 from every check and puts in his savings account. Smart. Jim takes $100 from every check and puts it into a stock account. Smarter. See, Ben earns 4% and Jim earns 12% on their money. Over the course of five years Ben now has $6760 saved up and Jim has $8538. They both saved $6000 in made money but Ben only earned $760 on his money and Jim earned $2538 on that same money.

Now let’s apply this concept to real estate. Ben rents a home $1200/month plus utilities. Jim buys a home worth $160,000 and has a monthly payment of $1200. After five years Ben has earned $0 on his rented home while Jim has written off an extra $10,000/year on his taxes by owning and now his home is worth $200,000 so he’s also earned an extra $40,000 owning his home.

People who are wealthy earn money and as their money grows they earn even more on that money and they begin to brag about how the rich get richer. Those who only make money continue to make enough to get by and then begin to complain about the rich keep getting richer.

In five years Ben and Jim both made the same amount of money, but now Ben has earned $760 and Jim has earned $42,538 on his money. Is this fair? Is this because of the system or their environment? No, this is because one person learned how the system works and benefited from it and the other did not.

I’ll bet Ben is the one complaining.

Utah Real Estate Market Continues to be Strong

All the recent talk of a bubble and the cooling off of the markets on left and right coasts seems to have only strengthened the local market for Utah. Many of the people selling in the coastal regions are moving inland, away from the natural disasters and high cost of living and realizing how beautiful a place like Utah really is. And real estate is local and is effected by local factors as much as by general factors, such as interest rates.

Here’s the most recent story about the Utah market from the Salt Lake Tribune. They mention that some areas have appreciated more than 40% during the last twelve months, but don’t let that fool you into thinking that the market is headed for a bubble. It’s not- and here are some reasons why:

First, the Utah market is not only appreciating- it’s correcting from the last few years of being flat while the rest of the country went up in value.

Secondly, being undervalued has brought in some investors, but most of the homes are being sold to homeowners. When markets get too many investors buying and flipping properties, like what’s happened in Vegas the last couple years, the appreciation is hollow. It’s self-created by the market and doesn’t have a solid foundation, so eventually the market has to correct downward. Utah’s market has not been mainly because of investors

Job growth is stronger than normal now and will continue to be during the next few years. An influx of businesses moving to the area and the low employment rate mean that there is, and will be a need for homes. This is a natural and healthy way for a market to appreciate.

Utah has the youngest median age of any state in the nation. Larger families and more children means more future housing needs for the area. A large percentage of the population in any area will continue to live in that area even after becoming adults, but the rate is higher than average in Utah, probably in large part because of the focus on family in the state.

There is still room to grow. Many areas around the country are running out of room, but Utah is still relatively rural and the metro areas, such as Salt Lake, Provo and Ogden still have some elbow room that allows new communities to be built and allows for homes in the first time buyer range to be built, getting these kids and young families started in the market so they can later move up (and pay more) for a future home.

What this all means is that the overall market in Utah is healthy and will continue to be strong for a while, regardless of what happens on the coasts, where most media is focused.

How the Salt Lake Real Estate market Got Hot

I remember my first few years selling real estate here in the Salt Lake area. It was a good market back in the mid 1990’s with a lot of people moving in from out of state and the market appreciating well. We would list a property and do some good marketing and the average days on market was around 45- 60 days, which suited my sellers fine.

Once a home went under contract we would schedule an appraisal and then didn’t even think about it again because the appraisal always came in fine. Not even once did I even consider that an appraisal would be anything less than what the sales price was.

So I left the state to work in Colorado and then went to California and about five or six years ago I came back to Salt Lake and the market was totally different. It was slower and homes were taking longer to sell.

Then, about four years ago or so when Utah was ranking as one of the worst states in the nation for foreclosure rates the state decided they needed to do something to slow down these foreclosures. Well, they couldn’t tell home sellers what to price their home at and they couldn’t tell Realtors how much they could list a home for, so the only control they had was with the appraisers. So they started fining and suspending appraisers and taking away licenses and in a few years the numbers of appraisers in the are went from over 2000 to less than 900. And the appraisers were all so worried about audits and getting in trouble that they wouldn’t appraise anything anymore.

You could have three homes in your area sell for $200,000 and one sell for $201,000 and one more sell for $203,000 and try to sell a home that was upgraded to the hilt with granite and stainless steel appliances and new windows and a new roof and upgraded hardwood floors and put it on the market for $215,000 and you would get an offer for $215,000 and the appraisal would come in at $203,000. So we would call the appraiser and explain about all the upgrades but the appraiser still woudln’t change their value because they were scared. So the Salt Lake market didn’t appreciate for years. For a few years the market was just flat because no matter how much a buyer and seller were willing to negotiate- the appraisers wouldn’t come in with a value that was more than what had already sold.

Then, finally, last March or so some news channel broke a story about how the Salt Lake market was the most undervalued market in America. And then another story followed and then another and pretty soon we had a bunch of investors and people from out of state buying property here in the area. And the best part was that many were paying cash. They would sell their home in California for over a $Million and take their $500,000 and buy a home twice the size for cash. So the appraisers didn’t have any say in it. The sellers could sell and actually see some appreciation, the buyers could buy the home they wanted, and everyone would win. And the market started to appreciate.

Now the market is hot and homes are selling, but it’s a very healthy, steady appreciation (around 14-18% in most areas) and it’s fueled by job growth and people moving into the area, not just investors, so it should stay healthy for a while. Even with the market appreciating the appraisers are doing their best to be conservative, which can be tough for everyone else. It sure is nice when we get cash buyers who care more about getting a good home at a fair price then they do about one person’s opinion.

When appraisers sell their own homes hopefully they realize how frustrating it can be when some stranger decides to choose certain homes for comps and not other homes and the value comes in low. At least I hope they feel that so they can appreciate what everyone else has to go through…

There’s Enough Real Estate Business for Everyone

So many different business models- different value propositions, different benefits, different strategic unfair advantages… Everyone has their own reasons why they are the best or they are the right choice but really, does everyone have to be the one and only? Gets sort of tiresome to me.

Sure, we all have our strengths, but there is no one and only choice in any industry, especially an industry like real estate where most companies are the same. Thank goodness for the new models coming into real estate- talk about a breath of fresh air.

When the consumer has informed choices they’ll choose what’s right for them. The best advantage is in having choices that many consumers will like- and not because they were persuaded it’s the right choice, but because they know their options and they understand the differences and then they choose you.

Some people think that if one person or company does well, then it must mean that they won’t/can’t and that’s just silly. There is plenty of business to go around. And it helps to be supportive of your competition. When sales people talk down the competition it only makes them look desperate and unprofessional. It’s good to point out differences and explain options, and then leave it with them deciding what they want.

I hope the days of the “hard close” are over for most sales people. Nobody likes to be pushed and everyone likes to have options. So let’s give them options. Oh,and good service would be nice, but that’s a whole different post.

Realtors shouldn’t be worried about BlueRoof

I was speaking to the broker of a large local real estate company earlier today and he was telling me that his agents were looking at BlueRoof and talking about how we might impact the industry in Utah. And he told me that one of his agents made a comment about getting out of the business because we would take all the clients. And while that’s flattering, especially since I know the agent who made the comment and she is a good agent, it’s not something I believe anyone is really concerned with, or something that anyone should be concerned with. Sounds like a natural curiousity of the unknown.

The traditional brokerage is not going away and I don’t think that’s a bad thing. If people have relationships with Realtors they have known and trust and they don’t mind paying whatever the commission is than that’s a win-win. It’s not only about commission, it’s about value. And how do you place a price on working with someone you know and trust and like? Redfin is a company that I really like and they’re doing some great innovative things but other local companies in Seattle like John L Scott and Coldwell Banker are still doing well also. And buyers who work with Redfin save a bunch of money and buyers who don’t maybe would rather work with an agent they know and like already instead of saving money.

BlueRoof is about giving the consumer more options. Some will like our options and some won’t and that’s why it’s good to have the choice in the first place. For too long the industry has been the same and the consumer didn’t have much choice- they could either pay high commissions or they could go it on their own.

And part of our model is to help identify those For Sale By Owner sellers who are willing to pay a buyers agent, which hopefully will help agents by giving them more homes to show and help the sellers if they don’t want to pay a listing fee and help the buyers because they’ll have more homes to see. And hopefully local appraisers will be able to use some of our FSBO sold comps for their appraisals so their appraisals don’t have to kill so many sales.

Everyone working at BlueRoof is a licensed Realtor and I take pride in that. Realtors have a larger role within the community than just showing homes and just like every profession there are good and bad. I think blogging will help weed out some of the bad and sites like Homethinking.com will help promote the good. And that’s definately a good thing!

Start ups need extra love

Before launching last week I had read a few books, countless blogs and spent thousands of hours researching everything from CPM to market on TV vs Billboards (Billboards are better for long term branding) to where to buy staples at the best price (Staples). I prepared and thought, analized and deliberated, argued and conceded, and when I finally started putting it all together it seemed like it was going to be much easier than I expected. That was two weeks ago…

Switching from being the broker at a large real estate company (Coldwell Banker) to my own smaller company has been a big pain in the ass. I left on good terms, of course, so I have had to wait until my replacement was ready to take over the office (tomorrow) and I’ve had to switch over everyone’s real estate license from the old brokerage to the new and file with the Division, who are so backed up with new applicants for real estate licenses that it usually takes days to get a phone call returned, and then the logistics.

Wow- it was a lot more work than I thought. Just the details, like setting up the computers and switching all the operating systems to be the same and networking the printer and organizing where the fax machine and copier will go and parking and coordinating business cards for 13 people at the same time and getting the new for sale signs designed and, and, and… and then the website. Oh, my word- the website… there have been glitches and problems and delays and today it went down for a few hours from the server being overloaded (which is good) and noone warned me (which is not good) and there just seems to be a million little things that need to be changed all the time.

And it’s expensive starting a new company with office space and IT and marketing and everything else you can think of. You plan for the expenses but then when you actually see the money leaving your account it’s scary. And I’m self-funded so I can’t call up my investor and calmly ask for more.

The emotions of helping all these people with their anxiety and the stress that naturally comes with change has been easier than I thought- everyone has either been really good about it or they’ve fooled me into thinking that they are handling it all well. And either way I’m just grateful.

Every person that goes to the website is so important to me and every contact from someone is so important that I can’t imagine how so many companies have such crappy service. My hosting company has the worst service times in the history of the known universe and they don’t seem to care. Being an owner of a business that blows me away, even if they are a large company- I would think they would hire more people to make sure they don’t lose clients, but obviously they don’t.

The support I’ve received from the local real estate community has been great and it means a lot to hear people saying good things, and the critique’s that come with a new idea can be brutal and very helpful. Anyone reading this please go to www.blueroof.com and let me know any suggestions and if you’re looking to buy or sell a home in Northern Utah let me know. You’ll be smothered in attention.

Real Estate is Not Like the Stock Market

In every city across America right now there are people investing in real estate. In markets where the so called bubble has burst (dumb cliche) there are people buying up the land, bidding at the sheriff’s auctions, and making offers on run down homes. These are investors who understand real state. Real estate is always a safe investment if you own for more than a decade. Always.

The real estate market goes up and sometimes creeps down, but it is not like the stock market. It doesn’t have the huge upswings and downswings that the stock market has. And real estate investors aren’t nearly as sensitive about things. A stock investor sees the CEO of a company wearing the wrong color tie and they freak out and it’s SELL! SELL! SELL! A real estate investor looks at the cycle the market is in and buys, sells, or holds accordingly, but it’s not a right now or you lose everything proposition.

And real estate never goes out of business. No matter how bad things get with a local market the land is always worth something. After Katrina hit New Orleans the whole place was devastated, but now, even with everything destroyed, people are snatching up as much land as they can get their hands on because they understand that in ten years that land is going to be worth a lot of money. More money than ever before.

There is no place in America where the land is not worth more today than it was ten years ago. Nowhere. When California crashed in the early 90’s a ton of people bought up property and waited. By 2000 that property had doubled in value and by 2005 it had doubled twice more. And now that the market is cooling it will still never be less valuable than it was in 2000.

And when the real estate market does come down it comes down much slower than the stock market so people have plenty of time to sell if that’s what they are going to do. If interest goes up it won’t go from 6.5% to 13%- it will be much more gradual ad there are many indicators that can tell when a local real estate market is heading up fast or slowing down. Job growth, interest rates, the commercial market, availability of land, and other factors all gives us an idea of where the market is going.

The “Bubble” is the stock broker’s way of projecting their bad hype on to real estate. And it makes for good reading so of course the media loves it.

In markets like Utah is going through right now people are buying run down homes to fix up and flip for profit. And they’re making a ton of mone. My sister-in-law just bought a new build home here for $1Million and sold it when it was completed for $2Million. Not a bad way to make some money, figuring they didn’t have to do any of the work.

And with our job growth we’re looking pretty good for a while. And even if interest rates go through the roof and a tornado rips the city apart people will still be making a lot of money investing in the local real estate market.

How Blogging can Revolutionize Real Estate

The real estate industry has been in a constant state of reluctant change for over thirty years. In the 1970’s and 1980’s the brokers had all the power. Agents would be told how they would do their business and where to work and even who they could work with. And the public had to go to a broker to get any information and for help selling their homes or finding a home.

In the nineties the power shifted to the agents. Agents started to go from company to company and brokers were allowed to recruit agents so this created a sort of free agency market for Realtors. Brokers would try to woo the good agents to their company by offering incentives and more agent-friendly policies. The public still needed to contact an agent or a broker to get information, so the agents had the power.

Today the power has shifted to the client, where it belongs. Todays home buyer and seller are more knowledgeable and educated in the process than ever before. Some buyers and sellers are more educated than many Realtors because many Realtors simply have not learned their profession well. Many agents make as much money as they can by doing as little actual work as possible. And hopefully those agents will be removed from the marketplace.

The value of a good Realtor today is more facilitatory. They coordinate the home buying or selling process and give area knowledge and expertise to their clients while protecting them and their best interests. The client can get a lot of information, but there is a difference between information and knowledge. A good buyers agent can inform their client of which areas have a better commute time to downtown and which shopping centerhas the freshest produce or what the basic feel of a neighborhood is. They can organize the information and help their client make good decisions.

A good seller’s agent can help the seller know the market value of their home and what the highest possible sales price most likely is. They assist their clients with showcasing their home or “staging” it so it can sell for top dollar and they market the home to the broadest possible audience.

And a good agent in either agency relationship will help coordiante inspections, disclosures, appraisals, and all the details- all the way through the settlement and closing.

Blogging can play a unique role in the evolution (not revolution) of the real estate industry. Companies and agents who stay in touch with the public and keep the pulse of their market’s needs and wants will undoubtedly be the ones to succeed at the highest possible level.

Blogging is the ultimate form of word of mouth marketing.

Often a company (not only real estate companies) will think they know what their clients need or want but actually be completely wrong. Usually this is because they have not listened to their clients. Many compnies make a habit of telling their clients what they want and trying to position themselves as the expert in areas that do not matter to the client. By utilizing the realm of bolgging a company can discover what their clients actually do need, and more importantly, want. They can listen. They can peek into their clients conversations and have real dialogue with them, resulting in better communication.

Blogging is such a valuable tool for any industry, but especially for one that is client-centric, like real estate. One of the key roles blogging will play in this industry will be it’s ability to help weed-out those agents and companies that continue to think that the most important factor in the transaction is the agent. This will allow greater market share for those of us who believe the most important factor is the client.

How BlueRoof is different from Redfin and BuySide

This afternoon I attended a Board of Realtor business luncheon and I spent some time explaining to my friends in the business what BlueRoof is all about. Naturally, people were curious about it because it is a new concept so I would like to explain a few things about the site, and in particular, how we are different from Redfin (which many people asked).

Lately I have been teaching the agency 1 & 2 courses for the real estate school and I tell the students that I teach the courses because I believe in agency and what it stands for. I don’t ask to receive a teachers salary for my time because that’s not why I teach. I just like the opportunity to discuss with these new agents entering the business how important agency is and how you always win if you put the client first.

BlueRoof is all about the consumer. Our business model is about empowering the consumer with choice. We connect buyers and sellers together in one place with a Realtor coordinating the transaction so everything goes smoothly. That sounds canned to me now because I’ve made that exact statement so many times, but it is the essence of what we are doing.

Buyers can find a home on their own and make an offer directly on BlueRoof.com  We do this because there are some people who just want to do the work of finding the home on their own. In that way we are similar to Redfin.

But we are a company of Realtors and even our staff members are licensed Realtors. If a buyer wants to have an agent help them right from the start, as most have and probably will, one of our licensed agents will help that client in the traditional way, including setting up showing schedules and showing them through the homes. This is how 99% of our clients choose to work, and why not? It doesn’t cost anything to have us help.

Another difference between us and Redfin, or any other real estate website that I know of, is that a major part of our model is to have FOR SALE BY OWNER (FSBO) homes on our website and help them sell also. Hopefully local agents will find this helpful because they can search for “Agent Friendly” FSBO homes, which means that the sellers are willing to pay a buyer agent commission. The For Sale By Owner market is still very small, so there won’t be many homes to look through, but we have them on BlueRoof so the consumer can see everything out there.

And agents will have more homes to show their clients while still knowing they will be compensated. And hopefully this will also be another source of comps for local appraisers trying to get an accurate value on a property, especially if they are having difficulty getting the value to come in on a property because of the appreciation we are seeing in our market right now.

Sellers can sell FSBO and market their home on our site FSBO for free. When they find a buyer (buyers can make an offer on the home on BlueRoof.com) they can have us coordinate the transaction for them for $1000. Most FSBO sellers do want an agent’s help, they just don’t want to pay the traditional fees.

A seller can also have a full MLS listing through BlueRoof-this includes full representation, placement in the MLS, a full professional virtual tour, high-end print marketing including magazine and newspaper ads, “Just Listed” postcards, showing coordination, and a professionally installed yard sign. We help them all the way through closing.

I think Redfin is good because it gives the buyer a new option. And we give the client a couple more options, and I think that’s a good thing. As I stated in my last post, this has been an exciting year for real estate. When I first about Redfin’s new business model I was a bit dissapointed because I had not put BlueRoof together and they beat me to being “first to market” with the concept of making the offer online, but then I realized it was also a good thing because now I had an example to look at. I was also relieved that my concept has a few pieces that, as far as I know, nobody else has done.

The new business models that are coming out now, like Redfin, Zillow, Prosmart, Trulia, and now BlueRoof are all ultimately good for the consumer because the consumer has more choice and, finally, real options outside of the traditional real estate mold. The large brokerages aren’t going away and that’s not a bad thing. If someone wants to pay a traditional fee so they can work with someone affiliated with a national brand, or they just like that agent, then more power to them. And for those who want the choices we offer…

BlueRoof.com Launches 7-4-06

I’ve been anxious to finally be able to say that. Our website launched this weekend, although it is still far from being a finished product. Hopefully consumers will see the value in the model we have developed.

I’ve been researching and designing the model for a while now and it’s been interesting to see how fast the industry has been evolving this year. I think the industry is finally going through a revolution, and it’s really an exciting time to be in the business of real estate.

I think that the consumer wants to have the help of a professional Realtor when they buy or sell property. Having someone with real knowledge and expertise to guide you through the transaction and ensure the correctness of it- that is important. But the consumer is starved for choices and value. The historical commission structures don’t appeal to most people and haven’t for a long time, but they only had two choices- either go it on your own and try to sell “For Sale By Owner”, which means being unrepresented and having all the buyers who are working with agents not see your home, or they could pay very high commission rates of 6% or more to have an agent represent them.

And if it were that simple the choice would be much easier. But then consider that most agents are horrible service providers and spoil the experience for their clients and the fact that most brokers lock their clients into contracts for months that not only guarantee that the broker will be paid, but also prevent the consumer from hiring a better agent to help them.

It only makes sense that consumers are tired of the old guard of Realtor and want a fresh alternative. Enter Propsmart and Trulia and Redfin and Zillow and now BlueRoof to give the consumer better technology that can add more value to their experience.

The BlueRoof business model is to connect buyers and sellers together in one place with a Realtor coordinating the transaction so everything goes smoothly. Sellers can list their home and have full representation and a complete marketing plan for 1%. Buyers receive a rebate of any commission received, and when a buyer buys a home that is for sale by owner we’ll help them coordinate the transaction for $1000.

Buyers can find their new home on their own and make an offer on BlueRoof.com and receive half the commission or they can have an agent help them find their new home right from the start and still receive a commission up to $3000 (plus an additional rebate of up to $3000 if they use BlueRoof mortgage).

The website having “For Sale By Owner” homes on it hopefully can help local agents as well by providing a search for these FSBO homeowners that are willing to pay a buyer agent commission. Also appraisers can benefit from having a source to find comps when the MLS can’t provide them with homes that will help with their appraisal.

I’m sure we’ll learn a lot as we go, but it’s exciting to see it begin, finally.

Yahoo is a Mess

If you spend a lot of time online working, searching, researching, and running a business, as I do, you probably already know that Yahoo is a mess.

Trying to use their paid advertising system is like getting your head kicked repeatedly by a mule. They’ve made the process about as complicated and user-unfriendly as possible. It’s almost like they have tried to make it a crappy process. Either that or they are untalented at design and customer service.

They’re pretty good at making a lot of money from people in a ton of different ways. But it seems like the money is all they care about.

Their search results are not relevant and they seem to make no strides to make it any better. They make you go through this intense process to get your paid ads online, including having a worker personally approve your ads, which is a total joke. My real estate website was originally deemed to not be a real estate website, which is interesting because the only thing it has on it’s landing page is real estate information.

If they had people actually look at search results maybe they would be able to place better sites higher on their organic results, instead of only wordy sites with as many useless links as possible. I go to a website to find information, not a hundred links to other sites with links so I can go to more sites with links. Where do the links stop and I find a good, user friendly site?

SEO in general is retarded. It rewards a site for being as generic as possible. Search engines like wordy sites with lots of repetitive phrases and tons of links. There is no algorithm for user friendliness or design, or even functionality, which is important to the person using the site.

All search engines have challenges, but Yahoo has more than the rest, beginning with the company’s want to make as much money from as many people as possible without caring about those people and what they want.

Google, by contrast, has such a simple process to place ads and much better relevance in their results, although Google also doesn’t reward a site’s user-friendiness, functionality, or design.

If search engines really want to make a great leap that should be their focus. Placing the very best overall sites at the top of the results. And Yahoo might want to get a soul..

Buyer Power

Buyers searching for a home today have more information and leverage than ever before. There are thousands of websites that give a buyer information on local markets, including school reports, area info, crime stats, geographical concerns and climate. And of course home information, too.

Even in a “Seller’s” market the buyer has a lot going for them. It costs them nothing to have a knowledgeable Realtor assist them and there are tons of great markets right now to invest in.

Real estate purchase contracts are written to protect the buyer and with all the disclosures and inspections available nowadays most buyers can avoid the pitfalls that were more common in years past.

Most of the people who rent just don’t realize how easy it is for them to buy. If children were taught by their parents how easy it can be to buy and how smart it is to buy, the rental markets around the country would probably crumble because noone would want to rent.

If buying your own home is still the American Dream, it’s easier now to get it than ever before…