April 2008

Video. It’s a tough dragon to slay. My most recent attempts have done little more than wound the poor beast.

We know people like pictures, and we know that pictures sell homes. Over the years, our stills first morphed into the 360 degree fish-eye lens tour. Then, when it became clear that the consumer found these cumbersome, the photo slide show came along. Finally, the photo-rich visual tour of the pan and zoom variety set to music was born. It’s where we go from here that has me in a bit of a conundrum.

Our current visual tours are “sort of” video in the sense that there is movement and sound. It could be argued that this format gives a more complete picture of the home being showcased than could any traditional video footage complete with my chipper voice-over. So what’s missing? Entertainment value.

The perfect video home presentation, I believe, is going to include the following:

• First and foremost, it must give a complete picture. The buyer needs to feel as if they know the floor plan, the flow, and feel, not to mention the details, of the home once they have finished, that they have been virtually delivered to the space. Our current tours do well in this sense.
• There needs to be a hook. Online shoppers are speed browsers, their remote is their mouse, and you only have seconds to capture and hold their attention before they click through. We are currently missing the hook.
• Both the agent-as-host video and the voice over video counterpart need to provide something of value to the buyer which the traditional visual tour does not. This is a tougher one to get your arms around, particularly if you are dealing (as we most often are) with tract homes distinguishable only by their unique upgrades and appointments. Why do you think we are able to provide a link to Scripps Ranch floor plans on our website? Because housing in our community is fairly predictable. Look! They put the TV on the other wall!
• From the agent’s perspective, video is an opportunity to showcase the agent. While this may mean little to the seller of the home, the reality is that listing agents market themselves in large part through the homes they market. Unless you have the voice of James Earl Jones or the acting skills of Meryl Streep, true video can backfire. I fall more into the category of Alvin the Chipmunk and the Olsen twins.
• Practically speaking, unless your  agent lists one home a year on average, the video needs to be something producible on short notice and with minimal time investment. Given enough time, I am confident I could produce a compelling short that would send any serious buyer scurrying for his checkbook. The problem is what we call value-engineering. While I am out channeling Francis Ford Coppola, I’ve got six buyers, two property inspectors and one ticked-off termite guy camped out on the front lawns of various homes throughout San Diego County. Alternatively, someone needs to offer a cost effective service for not only producing the video but for ”designing” a unique and creative presentation for each home I need to feature. The trick here is keeping it fresh. As soon as a formula is developed, it is destined to be perceived as tired and canned. Click. 

Here is an example of a video which hit on three of the five cylinders beautifully. The problem I see is two-fold. It is so good, it is destined to be a one-hit wonder. (Admittedly, Mike produced this video as part of a contest.) Secondly, while it sells the agent beautifully, does it really get the seller one step closer to that Sold sign in the front yard?

Ultimately, our marketing decisions must consider cost, time, and return on investment, and it is forever a balancing act. If any of our five readers are trolling, I would love to hear both the consumer reaction and the agent solution. And, if you are a vendor who has a cost-effective way to tame this beast, do tell!

photo credit: JasonJT

Want to feel special? Just submit the online form. Our agents are standing by.

The announcement came Monday and, as always, I had to let the pot stew for a bit. We all know that the beef gets more tender the longer you cook it.

Redfin, those freakishly hip fellows who promised to stand traditional real estate on its head, just got a little more, well, traditional. Recognizing that those darn buyers refuse to be entirely clinical when spending hundreds of thousands of dollars, they just refuse to let go of that silly emotional baggage, Redfin is now at least open to the idea of doing a little more… for a little more, of course. Dang, this business of selling homes is more complicated than we thought!

Redfin is now offering a premium home-buying service, which lets our clients tour homes to their heart’s content. The name of the service is Redfin Select.

Why not? The USDA has been using this tiered method of grading the quality of their meat for years. Select, alas, is inferior to Choice and Prime, but it beats the socks off Cutter and Canner.

About the tours:

• Redfin tours are up to two hours each. You can see as many as five or six homes, depending on your route.
• Tours are available seven days a week, from 9 a.m. to 6 p.m. We’ll get you on a tour within 48 hours of your request, often sooner.
• Redfin offers rush-hour tours, 40-minutes each, Monday through Thursday 6 p.m. to 8 p.m., for when you need to see one or two homes quickly.
• You can schedule up to two tours per week.

photo credit: John Edwards 2008 

This offering for the more special clients (special as in a serious drain on the old resources) will sadly only be available in the Seattle market initially.

…we’re only taking 20 clients at first, so we can be sure to have enough tours to go around for everybody, even on short notice.

And until we can rent a bigger bus.

I could have a field day with this one, but I suspect our five readers care very little about the wacky goings-on at the Redfin think tank. Let me just say that if the buyer of one of our recent listings had used this system for the home that sold in one day with multiple offers, he would be back on the cattle car next week (but only during the hours of 9 a.m. and 6 p.m. and with 48 hour’s notice and not more than twice, assuming he was able to “get the forms” from his field agent in time).

I do find it amusing that it took a mere 2 years and over $20 million of venture capital for the self-proclaimed champions of buyers’ rights to figure out that people want to see houses before they purchase. What’s next? A program where a buyer can request a field agent who, if not exactly familiar with the neighborhoods in which they are interested, can at least find it with a compass and a note pinned to their collar? Now, that would be special!

Things seem to have gotten a little busier over the past couple of weeks, which has forced me to put my Yahoo! takeover plans on hold, at least temporarily. I have raised $6.87 so far which, I am proud to say, was procured entirely from the bottom of the washing machine tub, leaving a vast world of potential venture capital untapped.

It’s hard to plan the takeover of a Fortune 500 company when you have a job. Doing one thing very well is challenging enough; attempting to conquer on multiple fronts can tend to compromise your effectiveness in any one discipline. Ask Warren Buffet. No, wait, bad example. But then, he has “people.”

I have people, too. And it is these people, who are now in high school, who first helped me come to the realization that part-time work can often mean not only that you are working part of the time but that you are working with part of your potential. I am not speaking of the clock in and out job, one that is finished when you are finished, but of the career.

Prior to entering the exciting world of real estate, I was a traffic engineer. (Clearly, I am attracted by the sexier professions.) During my transitional years, between worrying about moving cars and  moving families, I became a dabbler of sorts. I dabbled in engineering consulting, and I dabbled in parenting. I didn’t set out to be a dabbler. Rather, I fully intended to excel at both. On one afternoon, however, I found myself at a conference room table with a hungry and vocal five-month-old tucked beneath my chair. Unfortunately, I was seated among a half-dozen full-time real estate developers of the male variety, none of whom had their own bundle of joy in tow and all of whom had wives. In all fairness to everyone present, including the one wearing the Huggies, I realized it was time to “pick one.”

The Laws of Distraction

In real estate, there are two kinds of dabblers. There are the part-time agents, of course, who are in their own transitional years. The licensed agent does not have a traditional employer nor the promise of a bi-weekly pay check, and the new agent is initially a debt center. This realty forces many aspiring agents into the role of part-timer. In addition to practicing real estate, they are also coffee baristas and teachers, they are plumbers and window washers, and they are mortgage brokers.

This distracted agent, when compared to the full-time agent, the one entirely immersed and committed to their profession, is going to be less effective; the Laws of Distraction dictate this. They may know a little about a lot of things or a lot about a few, but they will bring an incomplete skill set to the closing table.

The other kind of dabbler we see in real estate is the consumer. Children of the information age and armed with an Internet connection, they are coffee baristas and teachers, they are doctors and scientists, and they are planning on buying or selling a home. Unless they are in a position to quit their day job, they will ultimately need assistance to achieve the best possible results.

It is when the Laws of Attractive bring these two together that the Laws of Distraction can wreak havoc. Much like multiplying two fractions results in a smaller fraction yet, two dabblers can not make a whole. The consumers “leg work” can not compensate for the agent’s shortcomings, and to rationalize otherwise is dangerous. Even if that was not true, why would you, a consumer with nearly unlimited choices, ever consider settling for a fraction of the whole?

While many agents like to argue that the part-time agents are diminishing in number due to the challenging nature of our current real estate market, I am not seeing this in our local San Diego market. On the contrary, I am seeing more fragmentation. Market share is becoming a concept without definition. Why is that? Instead, I will tell you why that shouldn’t be: The Laws of Distraction. Things both the home buyer and seller care about are things that the full-time, totally devoted agent will bring to the equation more often and to a greater extent than their multi-tasking, part-time counterpart. It can’t be any other way.

Knowledge of contracts and disclosures, of situational transaction nuances and negotiating strategies, of market dynamics and local area trends, of available technologies and marketing opportunities, and of hyper-local issues such as schools and floor plans and subdivision characteristics is only a partial list. As a buyer or seller, on which of these are you willing to compromise? More importantly, why would you ever be willing to compromise? When considering an agent to represent you, before you pick one, make sure they have picked “one.”

photo credit: Teo (Agesci Lodi)

1. To sell your home, you need a buyer.

Source: Sandicor Multiple Listing Service (MLS), month over month home sale trends.

2. A buyer will become a buyer when they can afford your home and when they perceive value.

Median list prices for detached homes offered for sale in Scripps Ranch, Altos Research.

Median list prices for detached homes offered for sale in San Diego, Altos Research.

Are we there yet? No, not yet.

Blogging about real estate can be challenging these days. There is so much negativity in the press and in our daily dealings that the temptation is to dwell on the stuff that ires. The “Everything’s Coming Up Roses” post is not only more elusive this year, but on the entertainment scale of zero to tell-me-more, rants are both more fun to write and to read.

I have made a personal decision to limit my trips to Downer Town here.

But, there are some things that just must be said, which is why this morning we introduce and welcome a new guest writer - Brek Rigs.

Why are some people just so mean? by Brek Rigs

Why are some people just so mean? While I will go out on a limb and hold to my belief that most people are genuinely honest and decent and caring of their fellow man, two stories were related to me recently which reminded me that I need to get out more.

Last weekend, one of our buyers’ agents a buyers’ agent was putting up her Open House signs in preparation for the Sunday ritual event. This is a hard-working agent who is simply trying to make a living, and for the pleasure of working on this beautiful day (the Sabbath for many) while others were enjoying family and leisure activities, one lucky babysitter was being paid handsomely.

As a refresher, there is nothing glamorous about life as the Open House host or hostess. People breeze in and out for three hours, a large number of whom are as happy to see the Greeter as they were to get the audit letter from the IRS. We Agents understand this. Anyone who has had to tell their eighteenth Nordstrom sales associate within a sixteen-second span that they are “just looking” can relate. Open House guests can be a battle-weary bunch. Having signed in to dozens of guest registers and recounted their story (”We are thinking about moving to San Diego in 2027 if we get the job”) to dozens of agents within their first hour on tour, they can quickly become a testy bunch.

But, we the agent holding the open house is simply trying to do their job, and part of that job is getting the directional signs in place prior to the sounding bell. Nothing says ”sexy” like hopping in and out of a 90-degree idling car, dressed in your big girl (or boy) business clothes, while attempting to relocate dozens of unwieldy signs and sharp, poke-y metal stakes from your backseat to various street corners and to sounds of car horns and screeching brakes with the rush of the wind from oncoming traffic in your previously perfect but now, sweat-soaked hair. Agents leave their homes looking like a billboard for John Frieda and arrive at the Open House looking like Bob Marley.

Back to the signs themselves. We utilize I am told that there are two varieties of Open House signs. One is the traditional stake sign, and they simply need be stuck into the ground.  In Scripps Ranch, “ground” is best pictured as Mr. Slate’s rock quarry, only harder. There is a horizontal metal area at the base of the stake (just above the sharp, poke-y things now credited with having scratched all interior sides of your Agent-Mobile and having ripped the several holes in your plush leather seats); this is where the agent stands on the ball of her stiletto-clad foot and teeters with all her weight in the off chance that this will be the spot where the stake penetrates Mars. She will repeat this process until the parkway looks like a scene from Caddyshack.

The other type of sign is gaining in popularity, this being the sandwich, or A-frame, sign. You can fit exactly one of these in your backseat. I One agent who drives a Volkswagen Beetle has found that the only way to deliver these to their destination is to put the top down on her convertible, which brings us back to Bob Marley, only now we are talking more Don King.

So it was that our this buyers’ agent was attempting to place the A-frame sign at a busy but critical intersection prior to her Open House last Sunday. She parked, engine running, in a bike lane for the eight seconds it would take her to avoid being killed dead (Cause of death: Runned-overness) and off-load the sign. Enter biker. Now, granted, she was temporarily stopped in a bike lane which, technically, is illegal. But, then, so is jaywalking, yet I suspect we have all been a one-man crime wave in this regard at some point. For her to have parked legally and accomplish the task would have required a bus pass and at least one transfer.

Biker (in a very loud voice): “You are parked in a bike lane. That is illegal!”
Agent: “I am sorry.”
Biker (in her face): “You are not!”
Agent: “Yes, I am! I am sorry, but I am just here for a minute, and I had no place else to stop (except Tucson).”
Biker: “No, you’re not!”

Well, you get it. The end of the story is that she returned three hours later to retrieve her sign only to find that it had be ripped from the A-frame and thrown in the southbound lanes of what Traffic Engineers refer to as a Four-Lane Primary Arterial. It had been run over multiple times and trashed beyond recognition. Now she had to pay a babysitter and pay for a new sign. While being mean is not a crime, destruction of property is, at least the last time I checked.

My parents were married on April 15th. My father always said this about their choice: “The day was already shot, so we figured we might as well get married.” This is how I one agent felt when she checked her voice mail this Sunday evening. She would have taken the call directly, but she had been on another call and has found it generally poor form to hang up on one person on the off chance that the new caller will be a better conversationalist.

Caller: ” I was interested in one of your properties, but I don’t have time for this sh*&.” Click.

Note to mean person: That was mean.

photo credit: MoBikeFed

Not too many years ago, when Kris and I would take our daughters, Becky and Emily, on an occasional road trip vacation, their famous question was the age old, “Are we there yet?” That same question is also the most frequently asked question of us today, but not from the girls. 

If I had to select one word to describe the 1st Quarter results for Scripps Ranch home sales, it might be “capitulation.” This is not necessarily a bad thing. We all know that for the market to reach equilibrium and stability there needs to be a bottom. I’m not suggesting we are there yet but it’s starting to feel close. Here is the summary of  the market performance in March and the Q1 (as always, from the SANDICOR Multiple Listing Service for 92131):

March, 2008

Sales: There were 19 sales in March, a 70% increase from the dismal 12 sales in February. But this also represented a 35% drop in sales as compared to March, ‘07. 

Prices: The average sale price was approximately $750,000 or $288/foot. Measured against last month, the average sale price is about 2% less, but the average price/foot jumped about 8%. Measured against March, ‘07, the average price per foot is down almost 15%. That’s significant.

1st Quarter ‘08 vs. ‘07

Sales were down 38% from the same period last year. The average sale price for 2008 is $735,577,  down 7%  from Q1 last year and price per foot was down about 11%. 

We’re Almost There 

What will be critical and most revealing is what happens in Q2 and Q3 this year. There are several factors coming into play that could accelerate the market out of the current doldrums.

It’s an election year and there is no better motivator for our legislators in Washington D. C. than job security. Although most of the results will be more noise and less substance, the cumulative effect of throwing so much crap against the wall may start to show results.  

Exhibit “A” - What should substantively help is the higher conforming loan limits (now $697,500 for San Diego County) and the FHA participation;

Exhibit “B” - Buyers are starting to see value and are coming off the sidelines. At one recent open house we held, there were more than 30 groups through. That property sold in three weeks with multiple offers. Another one of our recent listings sold in two weeks, again with multiple offers and our most recent listing sold in one day with multiple offers. So the question is, are we just that good or is this a trend?

As I used to tell the girls, “We’re almost there.”  Now, the real question is, “Where is there?”

Photo credit