View From the Fog

Omigod! It's what the internet was invented for!

2006-12-08T16:22:00.000-08:00

If you don't read Curbed.SF, you should. It is very "tongue and cheek" about local real estate. CleanOffer has been featured several times, with a December 4, 2006 article entitle: "The Data You Want, When You Want It". The article starts off...

We were yakking with a friend- a friend who's really serious about her real estate- and the subject of information came up. At which point she started raving about Clean Offer, an online "client management" service:

Omigod! It's what the internet was invented for!

Read Entire Article Here

"Post Your Listings on Zillow for Free"

2006-12-08T16:11:00.000-08:00

Most people have heard of Zillow, the free online home valuation service. In fact, if you’re anything like other people interested in real estate, you have probably already checked out your own home, a home you are interested in buying or (shame on you) your neighbor’s home. Fun isn’t it?

Now Zillow just announced that you can, “Post Your Listings on Zillow.com for Free”. In other words, both real estate agents and homeowners can fill out a form and upload their listing for the “whole world” to see. While listing aggregators are certainly not a new idea, coming from Zillow (who claims to have 3 to 4 millions visitors per month) it’s bound to make an impression. Interestingly, other lead-generating competitors, HouseValues and HomeGain simultaneously announced that they too will be allowing users to upload listings. Read More Here.

Real estate “porn”, as many call it, is definitely popular. These public real estate sites definitely entertain the curious looker. For the serious buyer or seller, however, none of these websites will have anywhere near the complete listing dataset as the local MLS or CleanOffer.com. Real Estate is a local matter. If you are serious about buying a home in Mill Valley, for instance, the only thing that matters to you is that you know about every home for sale in Mill Valley that might fit your needs. You could care less whether a website has a selection of listings throughout the country. It is simply unrealistic to assume that Zillow or the others can be anywhere near complete or accurate in their listing database. Plus, who will be policing them for stale/sold listings? Previous Blog regarding Listings.

As always, at CleanOffer we applaud innovation and believe that the real estate process needs to be far more transparent. Zillow and others like them are giving consumers more choices which is a good thing.

What do you think?

Realtors Descend on New Orleans

2006-11-14T13:08:00.000-08:00

I just returned from the National Association of Realtors convention in New Orleans. 30,000 Realtors converged on this town as the only major convention there since Hurricane Katrina. All the local merchants were incredibly appreciative. The town even gave the Realtors a parade down Bourbon Street. I did not get to the storm destroyed areas but you can still see remnants even in the downtown area.

The Expo itself was overwhelming with exhibitor booth after exhibitor booth. As expected, the main focus was on various consumer facing lead-generating tools. Of course, every vendor claimed theirs is the winning answer.

The questions I was left with are:
• Does a consumer really want to be somebody’s lead?
• What information is valuable and what is simply “noise”?
• Is a real estate agent really set up to handle these “leads”?
• How many of these companies will be around two years from now?

My take? It’s a mad, mad world out there in Real Estate with everybody from brokerages to third party vendors trying to get the attention of agents and consumers. The winners will be the ones who truly add value to the users in the simplest way possible. We are all too overloaded with information for anything else.

Real Estate Agent Compensation Ripe for Change

2006-10-13T18:14:00.000-07:00

The article below was written by CleanOffer and published on October 6, 2006 as a "Letter to the Editor" in Inman News, a leading online real estate news publisher.
++++++++++++++++++++++++++++++++++++++++++++
Discount brokers taking advantage of 'age-old inefficiency'

Dear Editor:

Online discount brokerages are simply taking advantage of an age-old inefficiency in the residential real estate business. Real estate agents are paid a fixed percentage of the home's sale price. This amount paid is irrespective of how much time the agent spends on the transaction or what skill level they bring to the table. Hence, the key financial motivator for real estate agents is to be the one named in the closing papers.

This contrasts greatly with other professional service providers such as attorneys or accountants who typically get paid by the hour. The higher their hourly rate (hopefully corresponding with their skill/experience level) and the greater their hours, the more they earn.
Discount brokers capitalize on this real estate commission inefficiency by doing as little as possible. Just be there at the end and get paid. If they can get the other agent to do more work discounters will happily rebate the home buyer some of their commission.

As long as the current compensation structure stays in place, these pioneers will exploit the situation. If traditional real estate agents don't like it than they must change how they are paid. Otherwise they only have themselves to blame.

David Faudman
CEO CleanOffer Inc.
San Francisco

Save Thousands in Commissions While Paying the Highest Price Possible!

2006-09-29T16:26:00.000-07:00

The Internet has spawned a host of new online real estate brokerages who offer commission rebates and discounts to homebuyers and homesellers. We at CleanOffer are big fans of innovation, efficiency and saving consumers money. A recent New York Times article entitled “The Last Stand of the 6-Percenters?” discussed discount brokerages at length.

Companies like Ziprealty and Redfin offer cool home search tools. Both companies give buyers and sellers they represent a nice commission rebate or discount at the close of escrow. Cool online tools and money back, that sounds pretty good doesn't it? The only problem is those consumers don’t get to select their own local real estate agent. Buying or selling a home is a people intensive business. A well-connected local agent can usually get a better net price (after all credits) than a less-connected agent. Plus, an experienced neighborhood expert knows the “skinny” on inspectors, other agents, etc. It's just the way it is.

As verified in side-by-side comparisons, only on CleanOffer do buyers and sellers get real-time search access to 100% of the listings in MLS. Plus we provide users with powerful email alerts of new or amended listings. Most importantly, clients get to pick their very own local expert agent to represent them without regard to brokerage affiliation.

The result is usually a safer transaction and a better net price than offered by a more hands-off online discount brokerage.

What do you think?

Internet Buyers: Smarter, Richer, Younger, Happier?

2006-09-22T10:18:00.000-07:00

According to a California Association of Realtors 2006 study, homebuyers who use the Internet in their home search compared to buyers who don’t are:

- Better Educated
- Make more money
- Are younger
- Felt more confident in the home buying process
- Physically looked at far fewer homes
- Are MUCH happier with their agent

Sounds pretty good doesn’t it? Heck, who wouldn't want to be smarter, richer, younger, confident, efficient and happier? At CleanOffer we certainly feel that an empowered buyer is a better buyer.

What do you think?

The Median Marin Home - The Actual Home - Marin

2006-09-16T00:16:00.000-07:00

We are always reading about the median sales price of homes sold somewhere during some time period. Median price is the middle price where half the homes sold for less and half for more. Wouldn’t to be interesting to know what home that was? I mean the exact home that came closest to selling for this median price. We think so! This moves it from the abstract to an actual house.

For the three months from June 17, 2006 to September 17, 2006 the median sales price for a single family house in Marin County was $979,500. The home that came closest was:

13 Maple Ave, Kentfield (more info)

Sales Price: $979,500
Beds: 4
Baths: 3
Sq Ft: 2000
Lot Sz: 0.166ac

Please let’s us know if you want more of this kind of thing.

Real Estate Agents: Then and Now

2006-09-15T16:19:00.000-07:00

“Don’t let the buyer know the addresses the houses you are going to show them until they are in your car! Otherwise, you can’t be sure that you will get the deal.” This advice was given to me by an experienced agent when I first began selling real estate in 1990. Boy how times have changed!

From stocks, to travel, to real estate, the Internet has empowered buyers with direct access to information that they previously could only get from their agent/broker. However, unlike stocks and travel which are essentially commodities, buying or selling a home is a very complicated matter.

Still, with so much information available on sites such as CleanOffer.com and others, empowered buyers expect a far different level of expertise from their agent than they did in days past. The old model of the real estate agent controlling consumer access to property information is disintegrating and is being replaced by one where agents are paid largely for their value-added advice. Simply telling buyers, “123 Main Street just came on the market for $925K”, or “it has a lovely kitchen”, simply doesn’t cut it anymore. Agents now must prove they are experts in negotiation, finance, problem solving, local market knowledge, service provider recommendations, etc. The Internet will not replace agents who have this expertise, rather it enhances their value. On the other hand, those agents without these skills must hone up or watch their business decline.

What do you think?

NAR Lowers Sales Forecast. - Question: Should we worry?

2006-09-08T14:05:00.000-07:00

The National Association of Realtors released an article yesterday suggesting that home sales will be lower as the market finds a happy medium between price and inventory. NAR suggests that his will be temporary, but with rumors of raising interest rates do you think it could be an enduring pattern?

Home Sales Forecast Lowered, Prices To Dip Temporarily

WASHINGTON (September 7, 2006) – Home sales during the rest of the year will be lower than earlier projections as the market works its way through an inventory and price imbalance, according to the National Association of Realtors^®.

David Lereah, NAR’s chief economist, said the most obvious effect in the near term will be with home prices. “A year ago we had record home sales and tight supply with buyers bidding over the asking price,” he said. “This year sales are slowing, homes are plentiful and sellers are negotiating. Under these conditions, we’ll probably see prices dip temporarily below year-ago levels as the market works through a build up in housing inventory…” NAR Article Continued

Posting Consumer Comments on Listings-Bad Idea

2006-09-07T21:32:00.000-07:00

Real estate websites ziprealty.com and reply.com now allow users to post comments and ratings on any of their sites’ property listings. On the surface this sounds like a reasonable idea. After all, amazon.com, cnet.com and others do this with consumer products. Wouldn’t it be valuable for buyers to know what other people think of a listing before they made an offer?

We at CleanOffer think not.

With books or electronic devices, there is always another identical item for sale. Each home is however, a one-of-a-kind. If a real buyer truly likes a property they certainly would not want to promote it to other buyers (or let the seller know what a good deal they think it is) for fear that they would have pay more. Conversely, sellers and their listing agents would have an incentive to write glowing reports on their own properties and negative reports on competitive properties.

The overall result would be false positive and false negative reviews which help nobody. I would venture to guess, however, that there would be lots of entertainment value!

What do you think?

Sales Down. Prices Up. Huh?

2006-09-05T19:10:00.000-07:00

July 2006 real estate sales data shows that, compared with last year, the total number of San Francisco Bay Area homes sold was down significantly. The same study also reported that the median sales price increased slightly over the same period. How can it be that sales are down while prices are up?

The answer is simple. Most sellers are not getting an offer with a price acceptable to them. Hence, they don’t sell which results in a decline in units sold. Those that do sell are the ones able to find a buyer motivated and qualified enough to pay their price, resulting in a slight increase in the median price for those that do sell.

The market, in general, is no longer like it was in 2005. When more sellers adjust their price expectations, units sold will increase and the median sales prices for those units sold will decrease.

What do you think?

Market Up. Market Down. Oh my!

2006-08-16T12:49:00.000-07:00

If you read the local papers, you can’t help but to be confused about the real estate market. “Prices Up”, “The Bubble bursts”, “Horror Story of a Buyer”, “A Seller’s Nightmare” to name just a few of the headlines. Then there is the always confusing, “Prices Down, Sales Up”.

So why do local newspaper publish so many real estate stories? Simple, it sells newspapers! We have turned into a society obsessed with the value of our homes. What ever happened to buying a home as a place to live and raise our families? Not long ago, the word “Equity” used to mean being fair to others! Now you can hardly go to a coffee shop without overhearing people talking about real estate prices.

Let’s refocus on buying the right home for a long term place to live instead of a short term investment.

What do you think?

Should Everybody get to see Listings Online?

2006-08-14T11:56:00.000-07:00

In the past few years, there has been lots of confusion, controversy and fear surrounding the online searching of homes for sale by non-real estate agents. In fact, this very issue is the subject of a Department of Justice lawsuit filed against the National Association of Realtors.

The local Multiple Listing Service (MLS) is the brokerage funded cooperative for agent-to-agent sharing of listing information. The MLS is the key tool for real estate agents to list and search property in exchange for a commission upon the completion of a sale. The controversy arises over whether or not the general public should have full search access to MLS listings. In addition, should agents and vendors be able to use MLS data in order to lure consumers in the attempt to generate customer leads?

In my mind, what gets lost in the confusion is the distinction between the curious public and serious clients. Few would argue that a qualified and motivated buyer should be able to see any and all properties that might fit their needs. This is the basic premise of CleanOffer.com: Give complete, unfiltered access to those clients who have proven their seriousness by committing to work with a real estate agent of their choosing. The question is, should the general public have the same access as serious buyers?

What do you think?

The Offer Process is Unfair

2006-08-09T10:55:00.000-07:00

You are ready to make an offer on a just listed home. Your real estate agent calls the listing agent of the property asking about any other offers and how best to proceed. Doing her job representing the seller, the listing agent says, “there has been a lot of interest and I think we might get four other offers not including yours.” So what does this mean and what do you do?

Will there really be other offers? How many? Are you being misled? How much should you offer? How can you still get the property without grossly overpaying?

The current real estate offer system is inherently flawed. First, even with identical offer prices, two offers are not the same. There are the issues of contingencies, financing and the like. Second, given the “silent auction” nature of the current offer system, there is no way to tell what offer price is just enough. It typically comes down the quality of your agent’s relationship with the listing agent and how well they can “probe” for information.

This inefficient, non-transparent process needs to change. Here’s my idea. The offer process should be open, with a level the playing field similar to how eBay works. Prospective buyer must sign off on all inspections and disclosures as a condition of making an offer. All offers must be accompanied by 3% deposit which becomes non-refundable upon acceptance of a given buyer’s offer. Most importantly, the current high bid price is clearly posted for all to see throughout the “auction”.

The advantages are obvious and many including: 1) Buyers don’t need to overpay to buy the home , 2) Sellers get full market price as anybody can outbid anybody else, and 3) Escrows close with near 100% certainty, sharply contrasting with the average 35% fall-out rate in the current system.

Sounds like a win-win to me!

What do you think?