Interactive Corp EarningsCast - MP3
7.1 MB MP3 of LendingTree Parent Interactive Corporation's latest earnings report.
7.1 MB MP3 of LendingTree Parent Interactive Corporation's latest earnings report.
Many real estate firms face the business succession question. Some firms sell to NRT, Homeservices or large regionals. Others successfully pass their organization to the next generation. The Economist looks at the attributes that the successful 1/3 use to pass from generation to generation (Subscription required). They identify three key factors in those that succeed:
Interactive Corporation, parent of lending tree and realestate.com, among others, announced today that it will split into two publicly traded companies:
When you sell your home, do you have to tell the buyer all the details -- good and bad?
The industry couldn't function without the armies of agents who help buyers and sellers reach mutually agreeable terms on those four-bedroom, center-hall colonials, and who generally collect hefty 6 percent commissions for their trouble. But a recent study by two University of Chicago economists suggests that home sellers should regard agents with some caution. The study does not suggest that agents are inherently untrustworthy. Rather, it says, the housing market remains inefficient, and the incentives for agents to maximize profits for their clients aren't powerful enough.
Within six months last year, Carlos and Betti Lidsky bought and sold two condominiums. Then they bought and sold two houses. They say they will clear a half-million dollars in profit, and none of the homes have even been built.Now Mr. Lidsky, a lawyer, and his wife, a charity fund-raiser, have put down a deposit on a fifth property, a $1.3 million condo in a high-rise under construction, and are planning to sell before the deal closes, without even taking out a mortgage.
"It is much better than the stock market," Mr. Lidsky said. "This is an extraordinary, phenomenally good result."
Kelly Zito:
Las Vegas' lucky number last year was 52 -- as in 52 percent. That's how much real estate prices jumped in the nation's fastest-growing city in one year, as a housing shortage set off a wave of speculation by investors from California and other states.But as any gambler knows, Lady Luck eventually turns a cold shoulder. Las Vegans wanted to cash in, too, and so many put their houses up for sale that they flooded the market. By the end of the year, some homebuilders were slashing prices.
Warren Buffett's annual shareholder letter includes a big pat on the back to HomeServies CEO Ron Peltier, along with earnings information:
MidAmerican also owns a significant non-utility business, HomeServices of America, the second largest real estate broker in the country. Unlike our utility operations, this business is highly cyclical, but nevertheless one we view enthusiastically. We have an exceptional manager, Ron Peltier, who through both his acquisition and operational skills is building a brokerage powerhouse.HomeServices 2004 earnings were $130M, up from 113M in 2003.HomeServices participated in $59.8 billion of transactions in 2004, a gain of $11.2 billion from 2003. About 24% of the increase came from six acquisitions made during the year. Through our 17 brokerage firms – all of which retain their local identities – we employ more than 18,000 brokers in 18 states. HomeServices is almost certain to grow substantially in the next decade as we continue to acquire leading localized operations.
Tyler Cowan looks at the DC housing market - interesting reading. He's on to something with respect to traffic.
Why have housing prices gone up?
Glaeser, Gyourko, and Saks cite regulatory obstacles as a primary reason why housing prices have risen so much since the 1970s. I am not convinced that this explains the possibly bubble-like run-up of the last few years, but here is the paper. Here are Glaeser's other writings on the topic. Via marginal revolution.
Barry Ritholtz nicely summarizes active real estate blogs that cover residential & commercial, finance and local sites.
The real estate boom has been good to agents like Mr. Neeley. Last year, he helped sell 48 houses, worth an aggregate of $56.7 million. This sum was nearly seven times the value of what he sold five years ago and more than any other agent in northern Westchester County, according to an analysis of multiple-listing data. He said he earned close to $900,000."I always wanted my business to grow," said Mr. Neeley, 51, as he pulled away from an open house in his white Bentley Arnage this month.
There are 437,000 agents in California, enough to form the state's eighth-largest city. With only 680,000 home sales a year, competition for listings can be savage.
Ms. Link and her husband, Jim, 42, a financial services sales manager for the Wachovia Corporation of Charlotte, N.C., belong to a growing segment of the upper middle class, executive gypsies. The shock troops of companies that continually expand across the country and abroad, they move every few years, from St. Louis to Seattle to Singapore, one satellite suburb to another, hopscotching across islands far from the working class and the urban poor.As a subgroup, relos are economically homogenous, with midcareer incomes starting at $100,000 a year. Most are white. Some find the salaries and perks compensating; the developments that cater to them come with big houses, schools with top SAT scores, parks for youth sports and upscale shopping strips.
One of the comments that came up repeatedly on the Housing is Not a Bubble column was the assertion that "You cannot short a house." As in the stock market, the lack of "informed short selling pressure" removed a source of supply that theoretically) would dampen price rises.Only now, it turns out to be no longer true.
"A Wisconsin-based title insurer has sued state insurance regulators for alleged failure to enforce a state ban on real estate kickback deals.
Numerous lenders and realty brokers" are steering home purchasers to title insurance policies on which they collect an illegal cut - while regulators essentially stand by, contends the Dane County Circuit Court lawsuit by Harvey A. Pollack, who runs Land Title Services Inc. in Wauwatosa.
The share of California homeowners late on their mortgage payments plunged to historic lows in the first quarter, according to a banking trade group.Across the state, only 1.82 percent of property owners were 30 days or more past due on their loans as of March 31 on a non-seasonally adjusted basis, the Mortgage Bankers Association found. That is the lowest default rate for California since at least 1979, and 0.31 percentage points lower than the default rate in the fourth quarter of 2004.
Title insurance, which is intended to provide protection against any disputes that may arise over ownership of property, is one of many required costs faced by home buyers. It is an expense that has come under increasing scrutiny as regulators in California and Colorado investigate whether buyers have been overcharged for the insurance.Some of the biggest title insurers, the regulators say, were paying as much as half of the policy premium for referrals of customers, suggesting that title insurance might be overpriced in much of the country.
In Iowa, though, title insurance costs are often 20 to 30 percent lower, sometimes even more, than average nationwide. The state banned conventional title insurance in 1947 after the collapse of insurers in Sioux City, and it instead offers an equivalent called title guarantee.
LIKE most homebuyers, Debra Kling did not pay much attention to title insurance when she and her husband bought a home in Larchmont, N.Y., last year.It was just part of the blizzard of papers they had to sign and the endless checks they had to write at closing.
She and her family moved in and all was well until her neighbor told her that they could not use most of the driveway they had assumed was theirs. Nor could she and her husband, Jeffrey Shaffer, build a basketball court for their 12-year-old son, Ricky, as they had promised they would when they moved from Manhattan.
It turns out that a decision in a 1987 lawsuit gave the neighbor the right to use the driveway - and took away that right from their house - but that was not disclosed by the seller or the real estate company, Ms. Kling said.
Nor did their title insurance company, Fidelity National Title, discover it, she said.
"If we had known this, we wouldn't have bought the house," Ms. Kling said.
Gina Edwards: Fast Bucks, Real Estate Flipping in Southwest Florida.
Realtors have taken some knocks lately in Washington, where antitrust officials accuse them of trying to stifle cut-rate competition. At the state and local level, though, real-estate trade groups are fighting back -- and in many instances prevailing.At issue is the proliferation of discounters offering lower fees on home sales than do traditional broker firms. In the past year or so, half a dozen states have imposed laws that require real-estate brokers to offer a minimum level of services, whether customers want to pay for them or not. Such hurdles could undercut the discounters' business model.
In a further blow, some local Realtor groups are imposing rules that make it harder for discounters to get their listings on national and regional Web sites. Even some discounters' advertising claims have come under attack.
Former Drexel Burnham Lambert Exec Leon Black is apparently doing another deal with Cendant (Black's Apollo Advisers made NRT happen for Cendant. Henny Sender has more:
Apollo Advisors LP is emerging as the possible winner over Bain Capital LLC for the marketing-services division of Cendant Corp in a close race. Both bids are considerably higher than the $2 billion analysts originally expected, according to people familiar with the matter.The pieces that Apollo may purchase are largely those that Cendant acquired via its' troubled merger with HFS.A final decision has yet to be made, and a bid from Bain could still top that of Apollo. An announcement could come as soon as today.
The higher-than-expected bid for the Cendant unit mirrors recent auctions in which some large private-equity firms dropped out, shaking their heads at the rising price. As in recent auctions, the high bids are supported by favorable financing terms from banks, which make some private-equity firms more willing to bid aggressively.
At Sapphire Pointe, a subdivision in Castle Rock, huge beige and cream houses, dubbed prairie palaces by local residents, are clustered along curving lanes and cul-de-sacs. Last week the builder, D. R. Horton Continental Series, was offering a four-bedroom, 4,371-square-foot house for $489,697, $40,000 below the listed price. The builder had added upgrades that included fireplaces; granite countertops; and metal banister pickets on the curving staircase. The master bathroom was bigger than some studio apartments in Manhattan.Many sellers of existing homes are offering incentives of their own. When Mary Ann and Brian Kuklinski put their mocha-colored three-bedroom house on the market in May for $275,000, they knew that a house nearby had languished on the market for eight months. After five weeks and 30 showings, they reached a deal by lowering their price to $270,000 and throwing in their washer and dryer, the refrigerator, and a swing set in the backyard.
California Insurance Commissioner John Garamendi said Tuesday that two of the state's largest title insurers have agreed to halt a kickback scheme that cost home buyers nearly $23 million, and said the insurers will pay $33.3 million in refunds and fines by way of restitution.Fidelity National Title and First American Title, the two firms that have agreed to settle, according to Garamendi, could not be reached for confirmation. A department staffer said settlement talks continued Tuesday night with a third firm, LandAmerica Financial, which allegedly had made $2.7 million in questionable payments in a practice known as "captive reinsurance."
In simple terms, big builders, lenders and real estate firms formed subsidiaries, called captive reinsurers. Ostensibly they were formed to share the risk of issuing the title policies. Title firms, in turn, paid these subsidiaries several hundred dollars each time an insurer issued a policy based on a referral from a subsidiary's parent company.
Robert W. Hahn, Robert E. Litan, Jesse Gurman (150K PDF):
This paper provides an economic analysis of the residential real estate brokerage industry. We find that the traditional model for residential real estate brokerage services may be dated, and could be improved substantially with some public policy interventions that spur innovation.AEI-Brookings LinkWe believe that there are numerous barriers to entry that are slowing the emergence of new models for serving consumers. Some of these barriers are likely to be anti-competitive. Examples include discrimination against new brokerage models and online brokers who wish to join multiple listing services; state legislation that would require minimum service requirements, effectively preventing "a la carte" offerings; and prohibitions by real estate commissions on providing rebates to customers. In our opinion, none of these practices should be allowed.
We offer three broad policy recommendations: First, federal and state antitrust authorities should carefully scrutinize efforts to limit competition in the residential real estate brokerage market. Second, state governments should refrain from adopting laws or rules that inhibit competition in real estate brokerage. Third, Congress should allow the Federal Reserve Board and the Treasury Department to permit banks, which have long been natural potential entrants into this business, to offer residential real estate brokerage services through separately capitalized affiliates.
We do not know which business models are likely to succeed in the marketplace for residential real estate services in the future. We do believe, however, that judicious public policy interventions could have a marked impact on improving services and lowering costs for home buyers and sellers.
So the currency shift, and its resultant impact on long rates (and therefore Real Estate), plays very much into our Bearish 2006 scenario.Consider the Yuan depegging in light of the increasing number of "exotic" mortgages: 30-Year Fixed mortgages are down to just over 40% from ~70% of all mortgages; Adjustable mortgages, up from under 10% to over 40%; Interest only mortgages, up to 20% -- from 0 in 2001.
Its hardly intelligent to take an APR when rates are at half century lows; Interest only mortgage holders don't really own their homes -- they are more like renters with an option to buy. Hey, that's the free market -- people are free to be as dumb a they want to be.
Where's the froth?That's what some owners are wondering as they struggle to sell their multi-million dollar homes. Despite all the talk of a real-estate bubble, sellers in some upscale markets around the country are lately resorting to lowering their asking price.
Why are Governors and state legislatures enacting regulations to make buying and selling homes as expensive as possible?We ask this question because in recent weeks three normally level-headed Republican Governors -- Matt Blunt of Missouri, Rick Perry of Texas and Bob Riley of Alabama -- have signed into law legislation that protects Realtors from discount competitors.
The PMI ranking puts the New York area at No. 14 on a list of frothy places. But National City ranks the Big Apple at a mere 68 out of 299 metro areas -- below such places as Flint, Mich., and Duluth, Minn. National City isn't claiming that Flint is pricier than New York, of course, but says Flint appears more overvalued in terms of supply-and-demand fundamentals.Metropolitan area rankings.No national study can take into account all of the factors that affect house prices, or determine whether a particular home or neighborhood is dangerously overpriced or a screaming bargain. Such assessments require the expertise of people in the local market. But the rankings do highlight certain cities and regions where buyers may want to be more cautious than usual. That's particularly true in the cases where the studies agree: The PMI, National City and CSFB rankings differ markedly -- but all include the Riverside-San Bernardino, Calif., as an area ripe for a downward correction.
"It's a toe in the water," Ms. Anderson said. That toe is likely to cause a splash among real-estate brokers, however, because Mr. Diller has long been seen as a major potential rival. Just as services like Expedia hammered local travel agents, online real-estate operators could eat into the revenue of local real-estate brokers, though selling homes is much more complicated than selling airline tickets.Not a surprise, the referral business is not very big, at least by Diller standards.IAC is active in residential real-estate through its LendingTree.com and RealEstate.com sites, which offer to find an agent for buyers or sellers. The brokerage firms where those agents work agree to pay about 30% of the commission to those IAC units, which share the money with the consumer, often in the form of a Home Depot or American Express gift card. IAC also offers such rebates through affinity programs with airlines and Costco Wholesale Corp.
Washington Post Real Estate Editor Maryann Haggerty:
Why don't I start off with a few numbers? As the regulars here know, I have no clue whether there's a housing bubble out there. But I do have a report on my desk, from the National Association of Business Economics, which surveyed a panel of 202 economists.Of those experts, only 14 percent believe there is a national housing bubble, but 79 percent believe there are major local bubbles in various areas. (But they don't say which ones!) Of those, 83 percent said they would buy a primary residence at today's prices, but just 17 percent would buy investment property.
So let's hear what you have to say!
If New York City is any indication, the hot housing market may be cooling. Appraisal firm Miller Samuel reports that the average sales price for an apartment in Manhattan fell almost 13 percent in the third quarter. And the Census Bureau says the backlog of unsold new homes in the U.S. hit its highest point since January 2000 in August. David Gardner talks with Fool Radio Economics Contributor Charlie Wheelan about the slowdown in the housing market.
Once the boom was under way, however, Toll Brothers began to try new things. It broadened its product line by building more condominium units and retirement communities. More significant, it scouted property far from its traditional base in the Northeast. By the late 1990's, Toll Brothers possessed land in 18 states. The company purchased expensive urban sites in Jersey City and Manhattan; it even bought the hulking Maxwell House factory on the Hoboken waterfront, across the Hudson River from Midtown Manhattan, in partnership with another firm, in order to demolish the industrial shell and transform the site into a gigantic condominium complex. According to Bob Toll, he came to see his company as one that could build any kind of luxury home, in any style, in any place where there was opportunity. And to him, that opportunity to sell luxury properties to Americans seemed immense.
NPR:
A new law in Texas spells out what real estate brokers must do for all their clients -- including taking their calls and informing them of counter-offers. The law comes in response to some consumer and broker complaints about discount or minimum-services brokers. Larry Schooler of member station KUT in Austin, Texas, reports.
We already made the case back in August that real estate was cooling.What Abrams does not show is the long term history of mortgage rates; Rates at half century lows are why the Bom has lasted so long lasting; Indeed, even after 11 rate hikes, mortgages are only at 6.1% -- lower than anytime prior to this boom going back to 1971 . (I found data on the Freddie Mac site).
And don't automatically choose the agent who suggests the highest price tag for your home. Sometimes an agent will overprice a home just to get your listing. Then, when no one shows an interest in your place, the agent will convince you to drop the price. By then, however, your listing is no longer fresh and exciting to the public.
It's one of American real estate's seamier practices, and it's almost impossible for consumers to detect: kickbacks and sweetheart payoffs among real estate agents, title and escrow companies, lawyers, and lenders, all for referrals of home buyers' mortgage or closing services.
In this revised and updated version of its online, interactive database Paycheck to Paycheck, the Center for Housing Policy presents wage information for more than 60 occupations and home prices and rents for nearly 200 metropolitan areas. Paycheck to Paycheck utilizes consistent measures of wages and housing costs so you can:
- See how workers in your metropolitan area are faring in the housing market;
- View the big picture for housing affordability for working families in various occupations across the country; and
- Use these analyses as a template to examine wages and housing costs in neighborhoods in your community.
"We might be the fat cats now, but there are some big eagles out there flying above us, looking at what we have" Peltier told a startled crowd of about 200 colleagues at a Wisconsin Realtors Association conference. "They're saying, "I'm gonna get a piece of that.' "The "fat cats" are the nation's 80,000 realty brokerage agencies and 1.3 million realty agents - "a tremendously inefficient business," said Peltier, president and chief executive officer of fast-growing HomeServices of America in Minneapolis. The "big eagles" include banks, title companies, retailers, credit card companies, online entrepreneurs and corporate conglomerates, he said.
Jamie Finch said goodbye to a high-pressure job in New York and "more money than I ever thought I'd make" to return to Washington 20 months ago and try his hand as a real estate agent.
Q. The Justice Department's antitrust division has been looking into the practices of the real estate industry, specifically whether the industry is stifling competition. What do you think will come of the inquiry?A. The barrier to entry in this industry is, in my view, virtually nonexistent. We think competition is incredibly robust and that's in part driven by the attractiveness of the industry.
Q. Some states are passing laws that require real estate brokers to provide a minimum level of service and that protect Realtors from discount brokers. What is your view?
A. We don't think minimum-service laws are necessary. The marketplace should determine that. A customer should be able to determine what he or she wants.
Martin Dunn, 38, for example, is putting up housing aimed at the bottom rungs of the economic ladder: limited-income working families and people with psychiatric disabilities, many of them homeless. And he is doing so through a profit-making venture.What he builds is called supportive housing, and he has completed two midrise apartment houses with 130 units and has started or is planning 11 more projects, all of them in Brooklyn or the Bronx.
David Leonhardt and Motoko Rich:
Despite a widespread sense that real estate has never been more expensive, families in the vast majority of the country can still buy a house for a smaller share of their income than they could have a generation ago
But there are plenty of buyers, with some seeking investments and others just needing a place to live after losing a home. Most people are buying "high and dry," to borrow the term on every broker's lips since Katrina, but even that seems a surprising vote of confidence in the long-term prospects of New Orleans and the surrounding parishes. In the West Bank area, which lies west of the Mississippi River, November sales were up 99 percent, in dollar terms, over November 2004, according to data provided by Latter & Blum. And in the high-priced Garden and Warehouse districts, the firm's November sales more than doubled.
Cheap money is the enabler of what has become an addiction to borrowing and creative financing deals from past decades are reappearing, warns June Fletcher in her book excerpt "House Poor."
They have turned Madison, a city of 208,000 known for its liberal politics, into one of the most active for-sale-by-owner markets in the country. And their success suggests that, in challenging the Realtor association's dominance of home sales, they may have hit on a winning formula that has eluded many other upstarts. Their site, FsboMadison.com (pronounced FIZZ-boh) holds a nearly 20 percent share of the Dane County market for residential real estate listings.
a href="http://www.nytimes.com/2006/01/12/business/12realtors.html?ex=1294722000&en=0d8307751a2522d0&ei=5090&partner=rssuserland&emc=rss">Glen Justice:
When the nation's largest banks decided at the start of the decade that they wanted to get into the real estate brokerage business, one major obstacle stood in their way: the National Association of Realtors.
Lobbyists for the huge trade group stonewalled the banks by tying up new rules at the Treasury Department and the Federal Reserve. Then the big score came in 2002 when the Realtors persuaded Congress to adopt a one-year moratorium to stop the banks altogether. It was a card the Realtors would play again and again. Four years later, bankers still have not cracked the real estate market.
"They are known as very aggressive," said Edward L. Yingling, president of the American Bankers Association. "Not many trade associations are willing to be that tough on an issue."
"There will be a softer real estate market in some areas as a result, but I keep telling people there is no bubble," Zell told Reuters after an economic conference in Chicago. "The fact remains that even with the gains of the past five years, American residential real estate prices in relative terms are among the cheapest in the world."
Nine out of 10 home buyers still use a real estate agent to purchase a home, but use of the Internet to search for a home has risen dramatically over the past several years, transforming the way the real estate industry does business.NAR release.
Kristin Joys discusses the high prices in Oslo, Norway, where she is a real estate agent. Joys talks about how expensive everything is and how locals deal with the high cost of living. Oslo overtook Tokyo this week as the most expensive city in the world, according to the Economist Intelligence Unit.
In the closing weeks of 2005, Chang-Tai Hsieh received nearly a dozen calendars and refrigerator magnets from real-estate agents eager to represent him the next time he buys or sells a home. Just before Halloween, two agents left pumpkins on his doorstep.Mr. Hsieh, an associate professor of economics at the University of California, Berkeley, thinks all this free stuff helps explain what's wrong with America's real-estate brokerage business: Rather than competing on the price of their services, agents tend to spend heavily on marketing gimmicks -- and pass that cost to the consumer.
As home prices soared in recent years, so did the percentage-based commissions charged by agents. Residential real-estate commissions in the U.S. totaled $61 billion in 2004, up 42% from 2000, estimates Real Trends, an industry publication. That's bad news for people who buy or sell homes. But isn't this trend at least making Realtors happy?
But it's his track record more than his resume that has won him serious credibility with his peers. In 1989 he earned the nickname "Scary Gary" by correctly predicting that the housing market in Southern California was headed for a tumble. Then, in 1996, he was one of the first to call the area's rebound. Since 1997, Orange County home prices have seen a 195 percent rise. Will the good times last another year? Gary doesn't hesitate. "Fifteen percent is pretty much in the bag for Orange County in 2006," he says. "It's impossible for prices to go down this year."
Head 3,000 miles east and talk to almost any broker in Boston, by contrast, and he'll tell you that business has slowed in the past several months. Consider John Ford. Just two years ago, five properties was the most he needed to show a prospective buyer before eliciting an offer. "And then it would be a bidding war," says Ford, who employs 30 agents in three Boston area offices. Today he's averaging 14 property tours before a skittish client is ready to buy.
When I saw a demo of the Zillow.com real estate service last month, it struck me as so obvious I wondered why no one had done it before.No doubt. One of our first products, in 1995, was a land records data warehouse. We incorporated assessement, sales, documents and probate information. We also attempted to incorporate GIS tools in a very rudimentary way (this was 1995).Then when Zillow launched on the Web last week, I realized why.
Offering automated property valuations via the Internet turns out to be much harder than it seems -- especially if you expect them to be accurate. But after running extensive tests on this ambitious national real estate service, I found it to be so inaccurate that it's not useful.
The essential problem is that land records and assessment data differs across communities, counties and states. In addition, the data is updated in an often irregular fashion.
Reuters reports that President Bush on Friday rejected the idea of any change in the U.S. tax code that would eliminate the deduction for mortgage interest:During a question-and-answer session in Florida, Bush was urged by a home owner to make...
Homestore Inc., an online real-estate company rocked by an accounting scandal several years ago, is changing its name and upgrading its services in a bid to attract more users and more advertising revenue.The Motley Fool has more.The Westlake Village, Calif., company, buoyed by a recent $100 million investment from private-equity firm Elevation Partners, said it is changing its name to Move Inc. and will launch an overhauled Web site under the move.com name in the second quarter. That site will replace three Homestore sites -- Homestore.com, HomeBuilder.com and RentNet.com -- and offer a general-purpose search engine for finding homes, apartments and move-related services, company officials said.
Years ago, Molly Bolanos looked for a home the old-fashioned way: She spent hours driving around in her real estate agent's car, hoping for the best and girding for the worst.One recent morning, the process went like this: Bolanos and her fiance were alerted to a new listing online. They checked out the pictures on the Internet, then drove over for a real-life look and, within hours, were preparing to make an offer.
"It can be 24 hours - as quick as 24 hours that you're out making the offer - and it's because of the Internet," the Seattle resident said.
Add real estate to the list of industries being forever changed by the Internet.
Home listings - once printed out in books available only to real estate agents - are obtainable to everyone online, accompanied by increasingly sophisticated photographs and virtual tours. Now, a growing number of online services are also cropping up to help people do things like judge house prices, survey neighborhoods and evaluate school districts, long before they ever snap the seat belt in their agents' cars.
The process of creating, incubating and converting internet leads continues to attract money and media attention. Zillow's recent launch, based on local valuation ointment (similar to that used by Homegain and others in the late 1990's) was supported by a large PR budget. Mention was made by the Wall Street Journal (Mossberg, no less), NY Times, CNN, The Washington Post ("built on a shaky foundation") and many weblogs.
AVM (automated valuation systems) are difficult
The hype / reality ratio reminds me of previous valuation lead generation schemes. I had dinner with a long time mentor who happens to own a gorgeous ocean front home one evening during the late 1990's. Over sushi, my friend asked if I'd heard of Homegain? I said yes. He mentioned that it was _______. He received a direct mail piece that offered to tell him what his ocean front home was worth. He responded. The results sent back to him included duplexes in the valuation.
There are a number of challenges to the valuation lead generation model. Let's explore a few:
- Tax assessor data is inconsistent both in its timeliness and data elements. One community might reassess annually and update sold data frequently. A nearby city might reassess every 3 to 5 years and update sold information occasionally.
- Land records (deeds, mortgage docs) are a potential gold mine for many applications, potential being the key word. Each county seems to have a unique method to organize their data, notwithstanding the state of Louisiana, which bases its land records on the French system. Some of these records are not yet available electronically, if at all.
- Geocoding [description] address and referencing data (assessment & sold information, satellite photos, demographic data) to a position on earth (latitude / longitude) offers some potential - see Zillow. Geocoding is not a panacea, however as bad data can eliminate some properties from the visitor's search (Virtual Properties validates all addresses via a frequently updated USPS database as part of our geocoding process).
Practical Local Valuation Lead Generation Opportunities for Agents and Brokers
UPDATE: Ann Brenoff:The first rule, in my view, is that whatever you present must be accurate and current. The product must be easy to use and finally, simple to request more information (generate a lead).
Let's take a look at some examples that our clients use today:
These tools are available on agent, broker and vow sites, powered by Main Street.
- Main Street HomeFinder (or Neighborhood Watch): Prospects can sign up for email notification of new listings, price changes, status changes, solds and open houses. The properties sent are stored against that prospect's contact information and are accessible to agents, teams or e-business coordinators for followup. Main Street applies rules to these leads as well, including personalized email and/or print (pdf) followup campaigns. These campaigns may include mortgage, title, insurance, relocation, concierge and other services. Internal followup campaigns can also be applied, automatically.
- VOW (Virtual Office Website): prospects can search via distance from (perimeter search) certain addresses for active and sold properties. Users can also generate driving directions, satellite photos and neighborhood maps of their saved properties.
- Comparable property maps: Main Street can display nearby active, pending and sold properties and concierage vendors on a map, in print format (pdf) and on a web page. These pages may include lead generation tools, which auto-populate contact records and activities.
- These leads can be fulfilled by agents, teams or e-business professionals using Main Street's CMA (Comparable Market Analysis) tools. Our goal was and is to always place the agents and brokers at the center of the real estate process and relationships.
By now, chances are you've been to http://www.zillow.com and may have concluded that the "zestimate" of your home's value isn't — make that izn't — worth the time it took to type in its street address. "Insufficient data" was the bleak verdict from BusinessWeek Online of the much-ballyhooed and anticipated website, which purports to tell you how much your home is worth. But the zoom and zeal of Zillow-checking has faded faster than the introductory low rate on an adjustable mortgage.Learn more about local valuation lead management tools available today from Virtual Properties. Learn more by calling (877) 901 9601 and ask for Jim or Nancy or email leads at virtualproperties.com
What could be more solid, more firmly rooted, than real estate? A house stands while occupants come, hopeful and expectant, and go, transferred, perhaps, divorced or just in search of something better. But people leave their marks. They knock down walls and tile the bath; they plant poplars in the backyard. A house becomes a statement of taste and priority and a daily source of pride or rebuke. "A most simple majesty" is how Franklin Hata, the emotionally-constricted protagonist of Chang-rae Lee's "Gesture Life," described this sensation of dominion over real estate. Hata also saw in a house "the shape of one's life, how it has transformed and, with any luck, multiplied and grown."
Does taking on greater financial risk to own a house prevent you from bonding with it?
The metropolitan-policy expert talks about the decay of older suburbs, the merits of long commute times and why the suburbs might endanger democracy.
For upwardly mobile young couples, restoring an old home is a rite of passage. And, as their blogs often show us, a nightmare.
Long before Martha Stewart, Edward Bok peddled a vision of the proper middle-class home.
What the story of one 400-year-old house in Amsterdam can tell us about today's housing market.
How Patrick Quinn is trying to become the Donald Trump of New Orleans.
Most people think of the tax break on mortgage interest as fair social policy intended to make respectable homeowning citizens of us all. They are wrong.
Tim Blixseth, founder of the exclusive Yellowstone Club, wants his superrich club members to unwind, even if he can't.
One couple's efforts to construct America's most ecologically friendly dwelling.
Why do houses cost so much when there's plenty of land to build on? Is public housing a good thing? Why do people still move to Detroit? Ed Glaeser has some answers.
Some $40 million homes are harder to sell than others.
How an undesirable neighborhood becomes the next hot spot.
How do you build affordable housing without federal money? Hitch on to a rising real-estate market and let the private sector do it for you.
On the streets where we live, bigger may not always be better.
The brokers and developers who are as hot as their properties.
A lawsuit in Silver Spring is focusing fresh light on a growing problem: Real estate agents are failing to disclose whom they represent in transactions -- even where state laws require them to do so in writing at their first substantive meeting with a potential client.
RIS Media [450K PDF Survey]:
Consolidation of Multiple Listing Systems and expanded data-sharing agreements are the key issues facing MLSs as the industry’s dynamics continue to evolve at an increasing pace, according to the latest survey of technology use in MLSs conducted by the Center for Realtor Technology of the National Association of Realtors®.CRT’s fourth annual survey of technology use shows major new trends and emerging issues, including a decline in support for public Web sites, increased concern for information security and accelerating trends in technology use, including major increases in the use of mappin