Agency

Not long ago, we were “hired” by a couple to help them with their purchase of a home. This alone could be the story, as I have written in the past about how so few buyers go to the extent that sellers do in interviewing and selecting their representation. This couple gets big props from me for taking the time to evaluate their choices, for even recognizing that they do have choices, rather than finding me on a street corner with a complimentary notepad pinned to my collar.

At our first meeting, the couple asked how we would be keeping track of the homes they would be looking at over time, and how we might be helping them to organize the information.  This, too, could have been the story. The first rule of being a good buyer’s or seller’s agent is to listen to the client. Each will have different needs and different priorities; customer satisfaction comes with being able to understand the things that are important to each individual and deliver. I have seen agents who continue to email their clients even though each time the client contacts them, it is by making a phone call. In a co-listing appointment not that long ago, I watched a seller say that his highest priority was a fast sale, and then I watched the agent argue for a higher price to “test the market.” Are you listening?

So, our buyers were telling us two things. They were communicating their expectation that the home search process would be perhaps long and would involve many homes, too many to keep track of on their own. They were also expressing their expectation that we have a system in place to assist with the organization of information on the various homes they would be shown. I assured them that we could deliver, but (plug your ears, John and Molly) I wasn’t quite sure at the time how I would (plug your ears, Fluffy) skin this cat.

Our MLS system includes a Client Gateway feature which allows an agent to save “favorites,” and the buyer with their unique password can visit these listings and even make comments on each. I have never been a big fan. First, this feature is very limiting - The only information which can be provided here is the Multiple Listing page. There is so much more information from which a buyer could benefit in a one-stop shop: Floor plans, supplemental photos taken by them or their agent during the showing, and school information to name a few. Second, our MLS system is being replaced in the next couple of weeks (to better serve us), so anything I create today will be nuked by the end of the month.

My solution was elegant in its simplicity and, while I will probably find out that there are agents out there doing much the same thing, this was new to me. I created a simple blog to keep track of their showings:

• I created a subdomain within our San Diego Home Blog. Our hosting plan allows for ten of these at no additional charge. If I ever need more than ten at one time, I will have bigger problems than my hosting limitations, like finding time to shower.
• I used a lazy, default template so I didn’t have to think too hard. We weren’t going for style points here, but instead for efficiency.
• I downloaded two simple plug-ins. The first was a plug-in which makes the blog private. Only people who I have registered can see the site. There are many plug-ins available, and the one I used worked beautifully.
• The second plug-in I used was for the photo gallery. I picked a very basic photo gallery which is easy to deploy and navigate, and includes both thumbnails and full-size photos. The entire gallery is located on one page, but photos of each home are tucked neatly into their own folders.
• Each home viewed has its own “post.” Within this post, I wrote a brief overview (no homeowners fees, Mello Roos, 3-car garage). I also linked to the slide show, the MLS sheet, and the floor plan. Where the latter is concerned, we are lucky. Our arsenal of local floor plans has grown over the years so that if you are looking at a home in Scripps Ranch, we probably have a copy of the floor plan.
• As a footnote for the more geek-inclined, I linked to an uploaded PDF file of the MLS sheet. Because I am too cheap to purchase the full-blown Adobe software, I use a free program which allows me to create a PDF file of virtually any file or screen by using the “print” command.

I am quite impressed with myself! Steve, as is so often the case, was initially not as impressed. His take was that this was duplicative in that all of the information I am providing on the private blog is already available at various online locations. “Various” is the operative, however. One of the biggest problems I see for home buyers using online resources is the potential for confusion and information overload. Aggregating the information at one location will save your back button a lot of wear and tear.

I would show you an example of the end product, but its a private site. However, if you hire us to help you buy a home, you can have one too.

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)

Photo courtesy Gregg OConnell

I was accused yesterday, albeit in a light-hearted, “fun” sort of way, of writing in stream of consciousness style too often on this blog. For the sake of argument, we will define “too often” as “every time I dare to post.” Guilty as charged, but I am far too busy to make today the day my writing becomes organized. I’m shooting for Friday. Instead, I will take this first step and actually summarize my point ahead of my convoluted thought bubble, just so you know what’s coming.

For Home buyers: You are not powerless. When embarking on a home purchase, you are not a casual observer who must relegate absolute control of your outcome to a third-party player. There are specific, definable things you can and should do on your own behalf to, if not ensure total success (as you might define it), then to at least minimize the risk of having a very bad day once the Fat Lady closes escrow. After all, it’s your move! (That last one is trademarked, by the way, so watch it.)

Now, for the backstory.

In the transfer of real estate property, it takes both a buyer and seller to make it happen. This, of course, applies to the transfer of any products or services.

“Wow!” you say. “Kris really has her deep-thinking hat on this morning!” Let me assure you that this is a concept I see getting lost too often today. When something is offered for sale and subsequently purchased, and when that transaction ultimately involves two participants satisfied with the outcome, all is right with the world. If, however, the outcome is less than ideal, it is far too tempting to find a scapegoat.

One of my salad-days cohabitants recently purchased a shirt at the mall off of the mark-down table. “All sales are final!” read the sign. This was acceptable to her, because she loved the now $8.95 trendy tee. However, when she got it home and tried it on, she found an enormous hole in the back. Sure, we tried to return it, but we were not surprised with the answer (something about pigs being airborn), nor were we militant when the news was delivered. I could have asked for the manager, I could have written a letter to the editor, and I could have appeared on Good Morning America to expose the enormous injustice, just another example of The Man sticking it to the hard-working, common folk. Instead, I considered it a valuable lesson for my daughter. There is the issue of standing behind one’s product, but there is the arguably larger issue of standing behind one’s purchase. She really should have done a physical inspection during the contingency phase. Time to suck it up and call a handyman, one who knows how to use a Singer.

Here in San Diego, we are continuing to get the local news updates of the Carlsbad couple now suing their agent for having allowed them to overpay for the home they purchased in 2005. Jury selection began yesterday.

Now, not knowing all the facts, the couple could be simply looking for someone to blame for a purchase which, in hindsight and after several years of declining property values, they now regret. Or, the agent could have in fact not fulfilled his duties to disclose, advise and counsel on market trends and comparable home sales data. Either way, the buyers could have influenced the outcome.

You can only be a door mat when you lay down.

So, back to the it-takes-two argument. For the home buyer, you will in fact be dealing with two sellers. One is obvious; he has a home he would like you to purchase. The other “seller” is your real estate agent. He is selling his services to you, and once you have agreed to allow this agent you represent you, you have bought what he is selling. You inspect your other purchases before you make them - the home and even the shirt off the mark-down table at the cool surf shop. Inspect your agent before you buy!

Sellers routinely put us through interview processes which have us feeling like participants in the Iditarod and the Science Olympiad all at once. Many selling clients come to us through referrals and many require us to compete and earn their business. Why, then, have buyers come to assume that their representation needs no introduction or screening, that the first perky, warm body they find at an open house or street corner will do?

Conclusion (and note how I am summarizing in a very organized fashion):

• Buyers, you are not second-class citizens. You deserve representation.
• You have many, many choices, and do not need to select your representation with a sloppily hung dart board. This is particularly true if the pub is poorly lit and you have been drinking.
• You have a vast and wonderful wealth of information at your disposal about all things related to the home buying process, including price dynamics of your market. Your agent should be providing you with all of this data in order for you to make an informed decision, but a little independent research is good insurance. Call it checks and balances. Please take at least some control over the process and some responsibility for your decisions. Your agent is your employee, but your choices are ultimately your own.
• If at any point during the home buying process, you feel confused, isolated, overwhelmed or just simply like you are skydiving without a parachute, ask questions. Get answers. Demand true representation. If that fails, fire your agent. You have choices.

(Note: I am quite pleased with the relative direct and concise nature of the introduction and closing. Now, if only I could do something about all the stuff in the middle.)

 

Steve was dutifully reading his long-anticipated California Presidential Primary Election “Official Voter Information Guide” yesterday, and came across the all-important Proposition 91. This proposition calls for a State constitutional amendment regarding the use of transportation funds, but that isn’t important.

When evaluating how to vote on complex issues of which We the People have little understanding, we routinely refer to the arguments in favor and against which are conveniently presented to us by the “experts” immediately following the 10,000 word, small font legislative description (which we can not understand as we failed to complete our Juris Doctorate course work or don our magic decoder rings this particular day). So, I bring you this, straight from the Information Guide, which should clarify this critical piece of proposed legislation:

Argument in Favor: “As the official proponents of this measure, we are encouraging you to VOTE NO ON PROPOSITION 91.”

Argument Against: “No argument against Proposition 91 was submitted.”

Huh? Steve’s response was, “I can’t wait to read Proposition 92!”

Offering a home for sale has become a lot like our beloved Proposition 91 lately. All indications (the yard sign, the Multiple Listing Service entry, the flyers in the flyer pouch) are that the owner wants to sell. Yet, the arguments in favor are confusing and suggest otherwise. These are some of the ways in which you and your agent could be screaming “Vote No!”.

• Property flyers should not be appear as if they were created with a box of crayons while wearing coordinating oven mitts and then copied on a machine with a depleted ink cartridge.
• Showing instructions should not involve the imposition of obstacles such as “show only between 1:00 and 1:02 on the New Moon Pisces Rising. Agent must be present. Buyer must be prequalified by Seller’s uncle in Raleigh. Don’t enter garage - Agressive emus may bite.”
• MLS entries should be written in a widely-recognized language, such as Sanskrit. Or English.
• Photos should be professional, plentiful, and, preferably, of the home, not of the occupants or of the agent/photographer as reflected in the bathroom mirror.
• Condition should be ‘’show ready.” Now would not be the time to experiment with sponge painting, to redecorate in Early Hunting Lodge, or to try that new recipe for Pickled Puffin with Curry Chutney.
• Price (of course) should be based on actual sales data, market activity and competition, not on a call to the 1-800-Psychic Hotline.

There is nothing new here; we have written about these things repeatedly in the past. My proposition has a new twist. As a seller, it is not you who is to blame but your agent.

All of these mixed messages are ultimately delivered on your behalf by your agent and are within his control. The agent is the “expert” who is responsible for interpreting your needs and presenting the supporting arguments.

I am certain that seven hundred agents are out there right now, arms flailing, hollering, “The seller doesn’t get it! Their price is unrealistic, they didn’t agree to move the sofa (to the landfill), and they won’t allow showings on Monday through Sunday without a presidential pardon!” That very well may be, but then why did you agree to represent them? How can you get everyone to vote “yes” when the proponents are arguing otherwise?

When we “experts” sit down to meet with a client wanting to sell, we have an obligation to honestly advise on pricing and preparation, and in accepting a fiduciary role, we have an obligation to support our client’s proposition to the best or our abilities, with the best marketing, service and counsel we can provide. Sure, we have all lamented, at one time or another, encounters with homeowners who we felt had unrealistic pricing expectations. And, there will always be an agent out there who will ink the listing contract at any price and terms just to get the business, but it doesn’t have to be you.

If you see it as a losing proposition, then don’t accept the assignment. If you accept the job, accept it eyes wide open and don’t proceed to belly-ache about how unenlightened your clients are. You are supposed to be the “expert” who provides the analysis and supports the argument. Take responsibility, and get out and vote!

 

I want to believe in reincarnation. Not because I want to live over and over again (well, that would be nice), but because I fear that when I am fertilizing the lilies, there will be so much I failed to achieve, a cookie jar of excellence on the top shelf which I couldn’t quite reach. I want to come back as Marc Davison.

This post is quintessential Marc - the perfect combination of fabulous writing and dead-on message.

For the most part, real estate just tries to throw a net around everyone.To be all things to all people. Well, the sad part is, that doesn’t work. You end up appealing to no one. You are like everyone else. Plain vanilla yogurt…

I want to be the more satisfying, fun flavor with sprinkles. And this is one of the greatest values of blogging to me and to my potential clients. You may not like sprinkles, but you at least get the opportunity to peek into the generic packaging to see what’s truly inside before diving in.

What you call a listing, is really my home.
What you refer to as a lead is really just a person looking for some information. 
The neighborhood I live in you call a … farm. 
Once I make a simple inquiry, you incubate me as if I were an egg.
To keep me interested you drip on me rather than shower me with affection.
When you sell my home, I become a notch on your top producer belt.
You market to me as if your personality means more to me than the value of my home.

Agents are trained to be vanilla yogurt. From the day the new agent is shown to his cubicle, he is enrolled in a total emersion class in the language of real estate. While he is taught to farm and drip mail and court his sphere of influence (formerly known as friends), the ideas of professionalism and excellence and integrity are swept under the rug like so much clutter. When lip service is paid to these concepts, it is as a throw-away line, subordinate to the primary goal of getting the deal.

To be a doormat you have to lay down. Agents whine and bemoan the pervasive lack of respect for their numbers, yet we have spent our history trying to enter from the off-ramp. No wonder we’re a wreck. Of course we need clients to make a living, of course we need clients to demonstrate professionalism, excellence and all the rest, and of course we need to market ourselves to earn the customer’s business. But we are coming at it from the wrong direction. The lessons we need to first master are not those involving bulk-mail farming, chasing “expireds”, or converting open house leads. How can we possibly expect the public to respect us when the most respect we can give them is a Recipe of the Month card or a reminder to set their clocks back on Daylight Savings day in the form of a PrintShop-generated door hanger?

On second thought, I want to come back as a real estate Broker-Owner. My office policy manual will include the following:

• No agent shall be allowed to participate in a real estate transaction until they have successfully completed training in basic business practices, contracts, liability, and ethics - real training.
• No agent shall be allowed to participate in a real estate transaction until they have successfully completed training in technology and demonstrated competence through application.
• Ethics violations of any kind will be immediate cause for dismissal.
• No agent will be allowed to even think about paying (or having their clients pay) a Transaction Coordinator to manage their paperwork until they have done it themselves, start to finish, and a minimum of six times. Veteran agents will be required to self-manage at least one transaction per year as continuing education.
• Any agent who even thinks about a marketing program involving unrelated content, including but not limited to “List with me and get a free (anything)”, “Forget-Me-Not” (seed packet included), and “Your Neighborhood Specialist” will be hog tied and left for dead in the title company’s lobby.
• Pop-quizzes will be administered periodically to test the agent’s knowledge of fundamentals such as statistics and trends for their market, statutory disclosure laws, Board rules, mortgage rates, and how to multiply and divide integers. Agents failing to receive a passing grade will be excluded from next year’s office holiday party and have mustaches drawn on their bus bench images (with Sharpies). 
• Property brochures consisting of black and white photocopies of the multiple listing service entry will be set afire.
• Agents without a professional website and email address will be set afire.
• There will be annual performance reviews and minimum standards, not based solely on the agent’s “numbers”, but on the numbers measured against the satisfied customers versus destruction having been left in their wake.

Income alone will not be sufficient to ensure future desk space in my next-life office. This means that I will have to be selective, but I assure you that my office will be full. There truly are many, many exceptional agents out there; you just have to know what to look for, what to teach, and how to inspire.

I will let Marc work for me.