Archive for March, 2007
The Long Tail of Real Estate Listings
March 10th, 2007 Categories: Real Estate News, Real Estate Technology
This is a Long Tail. In case you were wondering what one looked like.
There have been a few posts floating around about the end of the traditional Multiple Listing Servcce…not a MLS, but the MLS:
Give us your data, we’ll charge you for it, then tell you how you can(t) use it
IMHO The ‘MLS’ is already dead, pretty soon the stench will drive away even the most loyal users.
Trulia, Google, Realogy, Zillow, etc are currently navigating a shift away from antiquated Listing Services towards Listing Systems.
All parties mentioned demonstrate that the current state of information sharing between and by real estate professionals is fragmented at best. IDX = SUX, any of the map based Listing User Interfaces offer a far better experience and are usually free….Its the progessive professional that understands why and how to implement and utilze these ‘tools’ to create their own personal value packages.
Alternative Listing Services (ALS, like Zillow, Google Base etc) become popular because they are feeding the Long Tail of Property Listings and subscribing to organic growth, SEO models. Ill fore go the detailed explanation of the hypothesis except to say : Whoever has the longest tail/ most choices, wins. Now, ive been afforded the same conventional education where Psychology says consumers are more likely to choose if offered limited choices. In reality, that theory is dead (too).
Today, right now, consumers want it all. They want to see everything thats available while shopping. And there are never seems to be too many choices. 500 cable channels are a testament to that, so are iTunes, Amazon, eBay, Google…its a Long Tail economy/market and real estate is not exempt, although it resists.
So, if the longest tail wins, then the current pool of ALS sites out there are still too fractious/ disconnected to provide the experience that consumers will come to expect. Each site has different depths of quality participation by local professionals and consumers, resulting in incomplete data dumps; baad for a Long Tail economy of choice… Granted its gotten better but one still must carouse 4-5 sites (at a min) to find maybe 85% of the information that should answer most consumer questions. And thats if you know where and how to carouse.
A Multiple Listing System that benefits both consumer and real estate professional could solve this ‘disconnected network’ problem. Open API’s are great but they don’t address the real problem that still exists: There is no easy way for agents to share listing information with each other and consumers using ‘closed-ended’ platforms, even under the most agreeable relationships and conditions. An open peer to peer type system would be ideal so long as a succinct amount of consistency is mandated and managed by the community.
Professional agents, on an individual level, must be able to adopt and share as much information as possible under the front of their (web) facing business. In other words, the System must look like it’s theirs, provided as a tool from within and not by an ‘adversary’. The System cannot make a profit from referrals or selling back the information, this much has been proven. The System must cater to the professionals needs on a parallel path to the consumer, making their jobs easier through efficiency. Zillow was so consumer centric they alienated alot of professionals. Redfin may as well have called themselves ‘XRealtor’, Trulia and Propsmart are nice Web 2.0 Mash-up UI’s but still lack stickyness.
Greg Swann made a post re: a post I made, centering around this hypothesis: The small guy would get wiped if big brokerage took their listings ‘in-house’– This actually happening is far more Orwellian than the idea of ‘Open Listings’; If Re/Max only shows Re/Max’s or other ’select ‘ brokerages listings, would consumers accept the fact that their Realtor was keeping their valuable info under wraps? Greg mistakenly feels that I advocate Realty.bots as the solution– ‘Terminator’ style, i.e. the machines will eventually rule the domain.
IMHO: Buyers Agent’s should evaluate, integrate/implement the Realty.bots and a host of other ‘Widgets’ for their benefit instead of combat them as a detriment to their ‘craft’…
Via a comment thread, my proposition for BA’s was pretty simple. Buyers Agents should charge similar to the attorney or accountant model:
- Interview and asses the client and their needs.
- Determine the amount of hours it should take to handle their situation.
- Establish a retainer contract that agrees to pay the BA this cost POC.
- If the scope of work obviously exceeds the retainer $$, start adding up the hours and charge appropriately.
Listing Agents should implement technology’s that create the greatest exposure possible for their clients, while still maintaining their individual branding. We can do this the easy way or the hard way….
The End of the MLS As We Know It?
Google Gets Deeper into Real Estate Listings
Trulia Lands the Big One
| Comments
Mortgage Pin Nears Housing Bubble
March 3rd, 2007 Categories: Mortgage News
It was called the Refi-boom…
From 2000 to 2005, the number of mortgage programs available to the general consumer went from hundreds to tens-of-thousands.
ANYONE could get a loan, even dead people got loans.
On 3/10/2007 it should be no secret that the mortgage world is on the verge of an epic correction. Fraud permeates the industry from the top down, with New Century looking to be the early mover under the ‘debacle’ category, although many more are sure to follow.
Reading any of the insider trades shows a list of bankers and wholesalers who are exercising damage control, by making major changes to their underwriting guidelines, closing shop, and/or settling lawsuits on the cheap now rather than go through litigation and a damning lawsuit.
The Problem:
The dream of homeownership was afforded to alot of people who had no business buying a home. State your terms (with alot of coaching), and a loan was delivered.
Brokers, Bankers, and the willing consumers should shoulder the blame. Some people were preyed upon, others played the game- Silently rationalizing the ramifications.
The Fallout.
Couple wholesale lenders tightening up their qualifying guidelines substantially (or eliminating them all together), with a record $1,000,000,000,000 in maturing Adjustable Rate Mortgages, and you get an ENORMOUS pool of demand with no supply. The products mortgage products many will need don’t exist anymore.
Indexes are rising back to historical norms. LIBOR, MTA, CMT, COFI, COSI, MBS Market, etc are all categorically and substantially higher than they were 3 years ago all but guaranteeing a minimum 1% rate increase, and as much as 4%. Refinancing into a lower rate without hi costs will be near impossible.
The Foreclosure Boom. As with any market correction, someone stands to benefit- If you subscribe to the logic that one should buy in a down market and sell in an up market, its about to be a Bear of time in the real estate investment arena, houses can be acquired for 10%-40% below what they appraised for just 1 year ago.
An imminent foreclosure boom means property is about to go on sale in a big way for the financially literate (which is shockingly low in our First World Nation) who are in position to snap up the deals; make no mistake, there are droves awaiting this scenario to play out. It’s the 90/10 rule in full effect.
As these discounted sales are recorded, future values become deflated since appraisers use recently sold comparable homes as the basis for establishing current values. The retro depreciation factor has yet to hit it’s baseline. If houses are being bought and sold at ~15% below ‘recent market value’, a ~15% depreciation for all similar homes in the area can be expected.
The writing has been on the wall.
Also see:
Mortgage Industry’s Internal Civil War
Interest Rate Pricing. The Disturbing Truth
Deceptive Mortgage Marketing Tactics
Related blogs and news:
FBI ISSUES MORTGAGE FRAUD NOTICE IN CONJUNCTION WITH MORTGAGE BANKERS ASSOCIATION
Regulatory fire may torch lending business Inman Real Estate News
Thx to mortgage-x.com for their chart 
| Comments
