Posts Tagged as real estate news (page 3)

Warning: Negative Real Estate Game Changers Part Two

Real Estate Market
Real Estate Market

Continued from Tuesday.

Brokers, beware!

  • CFPB/RESPA regulations resulting from the Dodd-Frank Wall Street Reform and Consumer Financial Protection Act of 2010 could turn out to be costly for real estate professionals not in compliance (there has been little or no effective enforcement thus far).
  • Big brokerages could become vulnerable to paper brokerages, undermining and possibly leading to massive changes in the IDX and MLS system.
  • Multiple, conflicting data sources could erode consumer confidence, leading to widespread industry changes to data creation, compilation, distribution, and the search process itself.
  • New business models, such as technology powered, agent-centric, flat or transaction based fee, salaried, or auctioneering models, could go mainstream, such as the interdependent/team models of the 1990s and 2000s.
  • Portals, which have already triggered a transformation of the brokerage business model, could undermine brokerages when it comes to lead generation for agents.
  • The runaway train of technology may make it increasingly difficult for small real estate entrepreneurs to remain competitive against mega-corps, such as publicly funded technology companies.
  • Courtesy of apps and technology, FSBO could develop into a DIY model, costing real estate professionals billions in commissions.

 
MLS malcontent/menaces:

  • The current MLS-centered era could come to an end in favor of new ways for real estate professionals to gain back control of listings and syndication, such as Project Upstream.
  • A consolidated, national MLS could become a reality, making obsolete today’s multitudinous local and small MLSs.
  • The low-level security of the MLS could fall victim to a cyber-attack, particularly those MLSs whose information is outsourced to third-party providers.
  • Off-MLS listings may further unravel the MLS and create legal risks as well.
  • Industry infighting between various brokerage sizes/styles regarding the future of the MLS.

Real estate professionals – stop living on the edge! Stay out of danger with the help of Properties Online today!

The Zillow-Trulia Merger & Your Real Estate Business

Last week, Zillow revealed publicly its intent to buy Trulia for $3.5 billion. Obviously this news (and the rumors we’ve been hearing for some time) are hot topics of conversation in the real estate world. The consolidation will allegedly take place whilst still maintaining the distinct identities of both Zillow and Trulia. Only time will tell. But what will a Zillow-Trulia merger mean for your real estate business?

Last week, Zillow revealed publicly its intent to buy Trulia for $3.5 billion. Obviously this news (and the rumors we’ve been hearing for some time) are hot topics of conversation in the real estate world. The consolidation will allegedly take place whilst still maintaining the distinct identities of both Zillow and Trulia. Only time will tell. But what will the Zillow-Trulia merger mean for your real estate business?

On July 28th, Zillow announced via a press release that “it has entered into a definitive agreement to acquire Trulia, Inc. … in a stock-for-stock transaction. The Boards of Directors of both companies have approved the transaction, which is expected to close in 2015.”

Spencer Rascoff, CEO of Zillow, stated: “Consumers love using Zillow and Trulia to find vital information about homes and connect with the best local real estate professionals. Both companies have been enormously successful in creating compelling consumer brands and deep industry partnerships, but it’s still early days in the world of real estate advertising on mobile and Web. This is a tremendous opportunity to combine our resources and achieve even more impressive innovation that will benefit consumers and the real estate industry.”

Pete Flint, Trulia’s CEO, then commented: “Trulia and Zillow have a shared mission and vision of empowering consumers while helping real estate agents, brokerages and franchisors benefit from technological innovation. By working together, we will be able to create even more value for home buyers, sellers, and renters, as well as create a robust marketing platform that will help our industry partners connect with potential clients and grow their businesses even more efficiently. Our two companies share complementary employee cultures with innovative, consumer-first philosophies and a deep commitment to create the best products and services for our industry partners.”

By the (self-reported) numbers:
• Zillow reported a record 83 million unique users across mobile and Web in June 2014.
• Trulia reported a record 54 million monthly unique users across its sites and mobile apps in June 2014.
• Approximately half of Trulia.com’s monthly visitors do not visit Zillow.com
• Approximately two-thirds of Zillow.com’s monthly visitors across all devices do not use Trulia.com.
• “Maintaining the two distinct consumer brands will allow the combined company to continue to offer differentiated products and user experiences, attract more users and maximize the distribution of free content across multiple platforms, apps and channels.”

The Zillow-Trulia merger might not create the “pricing power” juggernaut that many people fear. We’ve been reading comments by agents and brokers all over the web, and the fact is that many MLS boards and independent agents are starting to pull their listings – they simply don’t want to have to pay to advertise next to their own listings. There are also frequent rumblings about the data and Zestimates on Zillow being inaccurate.

Citron Research cites a deal struck between Realogy and Zillow/Trulia. Realogy—the world’s largest real estate agency, comprising Coldwell Banker, Sotheby’s, ERA, Century 21 and Better Homes—secured a lucrative deal for its agents that “prohibits all other agencies from advertising on their listings” at a cost of less than 95% what any other agency pays. What’s more, Realogy is aggressively pursuing their own online offering that will compete head-to-head with Zillow-Trulia in the consumer-focused online real estate space, with a new product expected sometime in 2015.

“We believe that there is a space in there that we can compete in. It will have features like Zillow and Trulia. It will have features that you wouldn’t put on a real estate brokerage website. An example of that would be Zestimate that Zillow uses. There are certain features that we believe we can effectively do and be able to cast a net outcome, a consumer-oriented facing website arena and be able to capture leads, reviewing [scrub then] as I described, and then put them in the hands of our sales associates so we create the business opportunity,” NRT CEO and President Bruce Zipf is quoted as saying on May 9th during a Realogy Investor Day Q&A.

Rascoff, Zillow’s CEO, has been quoted as saying, “It ought to be quite clear to a listing agent or a broker that it behooves their seller to have their listing displayed on Zillow and Trulia or sites that Zillow powers.”

Indeed, Zillow powers some of the internet’s major property search engines, and together with Trulia will indeed have a massive reach. But for how long, with competitors like Realogy making such significant strides, technologically and on behalf of its agents at the bargaining table? And how long before Keller Williams, Remax, Berkshire Hathaway, or other agencies demand and negotiate the same deals Zillow-Trulia have granted Realogy?

Many real estate professionals feel a loss of power in the face of the deal, which cements a growing resentment at having to pay Zillow to advertise their listings. Online forums reveal many of these agents calling for boycotts, while still others agree there isn’t another viable option.

Inman News contributing writer Joseph Rand writes in his Op-ed “Why Zulia doesn’t mean checkmate,” that: “The bottom line is that Zillow needs listings more than listings need Zillow. Which means that Zillow needs the people (brokers and agents) who take those listings more than they need Zillow.” I’d venture that he is bang on with that assessment.

Where does your business fit in? Do you use Zillow to obtain leads? One thing I can say with certainty is that this isn’t over, and we’ll be talking about the Zillow-Trulia merger for some time to come. How do you feel about all of this? I’d love to hear your thoughts from the proverbial trenches.

Has NAR Betrayed Agents With AgentMatch?

AgentMatch, the new offering from realtor.com, has agents in a tailspin thanks to realtor.com’s close ties to the National Association of Realtors (NAR). In a beta testing phase now, and only available to limited markets, the system uses data, not word-of-mouth, to recommend agents to home sellers. The product is decidedly for the customer, and agents are in an outcry that the service will hurt, more than help, their real estate businesses. Has NAR betrayed agents with AgentMatch?

NAR owns the realtor.com website and “Realtor” trademark, and licenses both exclusively to Move Inc. (a company in which NAR is a minority stakeholder), under the terms of a 17-year old operating agreement. Many agents are now questioning why NAR would support this move by realtor.com when the end result is not in their best interests. NAR’s official mission is to “help its members become more profitable and successful,” after all. Giving certain agents a potentially unfair advantage does not fit that mission.

AgentMatch is a consumer focused website that allows home sellers to search for creditable agents in their area, based on MLS data. The system begins by asking the user to enter their home address. Using this address, it compiles a list of all real estate agents in the area.

It then analyzes the number of homes currently for sale, each agent’s average sold to list price, the number of homes each agent has sold, and each agent’s average days on market for the past six months. Using these statistics, AgentMatch presents the active selling agents in a home seller’s area, providing a view into the details and past recommendations, which realtor.com says will “help you choose the agent that’s right for you.”

NAR’s stakeholder relationship and close ties with Move have left many agents with a bad taste in their mouths, and the belief NAR is condoning a service that will negatively impact their ability to do business and attract sellers. Real estate, after all, has long been a business about relationships, not statistics. And the qualitative data provided by AgentMatch is said to be restrictive and unable to provide the full picture of an agent or account for high quality agents who are new to an area or the field of real estate. What’s more, the system favors agents who work as teams.

“Ranking purely by production alone doesn’t come close to reflecting the professionalism and level of customer service an agent provides. Our agents are in a customer service business. No other service industry is rated on numbers alone,” says Keller Williams President Mary Tennant, who has been vocal in her opposition of the experimental agent ranking platform.

This isn’t the first time an MLS-powered agent ranking system has been launched. Redfin, a Seattle-based brokerage firm, put the brakes on its attempt in 2011, citing inaccuracies in MLS data and concerns that rating agents solely on MLS data created an incomplete picture. The Houston Association of Realtors met with the same result a year earlier, after experiencing agent backlash and outrage.

Launched first in Boulder and Las Vegas, realtor.com President Errol Samuelson expects the service to expand, at least, to an additional five or six markets, and has told media that people’s fears will go away as they “start to understand what we’re doing.” AgentMatch, he says, is realtor.com’s bold step toward maintaining relevance and attracting customers from away from sites such as Zillow and Trulia.

Former attempts to modernize service to consumers have also been met with negative agent feedback, but Samuelson quoted NAR statistics that show 89% of homebuyers used the Internet to search for a home, but only 9% find their agent online, and said, “That discrepancy will not hold.”

Not so, say agents across the United States who now see NAR as a competitor, even though they are forced to maintain paid NAR membership as part of their state licensing requirements.

One Virginia-based agent has gone so far as to launch a petition on Change.org urging NAR and Move to disallow the syndication of agent statistics.

Realtor.com has responded to criticism in an official statement that “everything from the algorithm to the data to the presentation all the way to the copy are being tested and then redeveloped — based on response from consumers and feedback from local board memberships.”

What are your thoughts on AgentMatch? We’d love to hear from you.

What Does the Average Home Buyer Look Like?

Short Sale Sellers Back in the Real Estate Market

During the worst of the real estate crisis in 2009, 45% of all homes sold nationally were foreclosures or short sales. But in the last quarter, sales of bank-owned properties reached their lowest level since early 2008. What’s more, thousands of home sellers are now outside the three-year penalty period and in the position to once again secure a Federal Housing Administration (FHA) Loan. Supply may be down, but demand is increasing as many families are now able to rejoin the ranks of homeownership. Across the country, short sale sellers are back in the real estate market.

Once the three-year waiting period (from the short sale closing date) has passed, homebuyers can obtain another FHA mortgage for as little as 3.5% down, the shortest route for buyers with less than 10% down.

The alternative – a conventional loan – requires up to a seven-year wait for less than a 10% down payment. That time reduces to four years with 10% and just two years if the buyer can put 20% down.

While conventional lenders often want to know the circumstances surrounding a short sale, the FHA loan is non-discriminatory after the waiting period has passed.

The biggest hurdle for these former home owners is time, and that hurdle is gone now for many of them. However, according to the Federal Reserve Bank of San Francisco, only 30% of borrowers who defaulted on their mortgages in 2001 had taken out another mortgage by 2011. There are plenty more considerations besides time and money; home loss takes a significant emotional toll, as well.

New contracts for home sales this year have been at their highest level in three years. With 2013 figures thus far having showed that the housing sector is in recovery, agents can start looking at a whole new group of return buyers, who are once again able, even if perhaps not quite yet willing, to become home buyers once again. May 2014 bring even more positivity to the housing market.

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5 of the Nation’s Top Ten Places to Sell a House are in California

The Movoto Real Estate Blog has analyzed the nation’s 100 largest cities in terms of population against a long list of criteria to determine the Top 10 cities in the nation for home sellers. When all was said and done, the results showed that five of the nation’s top ten places to sell a house are in California.

1. Fremont, CA

2. San Francisco, CA

3. San Jose, CA

4. Honolulu, HI

5. San Diego, CA

6. Plano, TX

7. Chula Vista, CA

8. Seattle, WA

9. Chandler, AZ

10. Gilbert, AZ

The study started with a list of the nation’s 100 largest cities in terms of population. Movoto then surveyed each across a set of six criteria. Says the Movoto Real Estate Blog:

Total Homes for Sale Per Capita
“A housing market with fewer properties available for sale will be more competitive, allowing sellers to set higher asking prices and increasing the likelihood that buyers will be willing to pay more.”

Median Days on Market
“Having homes that are on the market for less time is generally an indication that there’s high demand for them, but it also means that buyers will be in a weaker position to negotiate the sale price.”

Crime Rate
“The less crime there is, the more appealing a particular city will be to buyers, making the price they’ll be willing to pay to live there higher.”

School Quality
“On the same token, cities with better schools will also command a premium among buyers.”

Lower Unemployment Rate
“Finally, in a city with a lower unemployment rate, sellers can expect there to be more people who are actually capable of buying a home—getting approved for financing, potentially spending more, etc.

Last month, Movoto revealed the reverse – the Top 10 U.S. cities that favor the home buyer. These were:

1. Henderson, NV

2. Las Vegas, NV

3. Greenboro, NC

4. El Paso, TX

5. Lexington, KY

6. North Las Vegas, NV

7. Chesapeake, VA

8. Pittsburgh, PA

9. Fort Wayne, IN

10. Charlotte, NC