Just a short post during this holiday week to give a little nod to some neighbors to our south down in Portland. If you’re one of the many people out there these days trying to sell your home, or if—against the better advice of this blog—you’re in the market to buy a home; I recommend you take a moment to check out ChoiceA.
The guys that run the site have the lofty goal of eventually becoming a free nationwide alternative to the real estate agent-controlled Multiple Listing Services. Basically it’s a For-Sale-By-Owner (FSBO) site with a shiny graphical interface, free listings, and some tools to help your sale go smoothly.
Obviously I haven’t used the site to buy or sell a home, so I can’t personally vouch for the quality of the experience in doing so. They have some neat tools, and certainly also some room for improvement, but they’re on the right track, and you can’t beat free, right?
Give them a look and shoot them an email if you have any suggestions. Unlike the MLS, they are interested in getting as much feedback as possible from users so they can constantly improve their system.
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38 responses so far ↓
1
Michael
// Dec 26, 2007 at 9:19 am
As for the MSFT millionaire myth. I worked at MSFT during the mid 90’s as a contractor and saw the flood of newly minted millionaires every day. My old boss lived in a beautiful Bellevue house with four kids and retired very young. These are the type of people that the real estate agents talk about when they see this flood of tech money.
The problem is that those people don’t really exist anymore. I recently moved two friends that started at MSFT from 98 - 01. I was amazed. These folks were moving into postage stamp size townhouses or single family homes that they could barely afford. These were mid level employees with plenty of experience in Tech - not entry level. The stock boom at Microsoft has been over for several years yet agents continue to talk about these new millionaires like it was 1998. The truth is that every job MSFT has offered me in the last two years is at a third less than a comparable tech company. I get to hear about how valuable the stock is but I’ve been around long enough to know this isn’t true.
2
goin' for it
// Dec 26, 2007 at 9:42 am
Its nice to hear someone from the “front lines” say what I’ve been telling people. All I ever hear from my friends when I tell them that things are going from bad to worse is “well, we’ve got MSFT!” I just want to scream STFU!!
On another note, this Christmas eve I was talking with a concrete guy I know who said that some developments he was working on have been shut down because the builder hasn’t sold any of the houses built so far. This was up in the Mt.Vernon/Arlington area. The builder has apparently lowered the price by 15k on the existing houses but hasn’t had movement. It was amazing to hear a ground zero account of the affect of this whole thing.
3
vboring
// Dec 26, 2007 at 9:53 am
debt forgiveness will not be treated as income for tax purposes:
http://seekingalpha.com/article/58319-congress-expresses-holiday-spirit-by-waiving-debt-forgiveness-tax
one more barrier to foreclosure has been removed.
talk about moral hazard.
4
softwarengineer
// Dec 26, 2007 at 10:03 am
MLS MEANS MORE LOST MONEY ON SEATTLE SHACKS
5
softwarengineer
// Dec 26, 2007 at 10:06 am
I WOULDN’T WORK FOR MSFT EITHER
I watched their $50K salary for program managers freeze since the 1980s.
But the stock options will bail you out. Not.
6
rose-colored-coolaid
// Dec 26, 2007 at 10:15 am
Note to self: cancel subscription to “How to Sell Sleazy” magazine.
It’s great to see all the alternatives. In a twist, it could end up being the crash that causes the mass exodus to FSBO. I always figured only companies started during the boom (w€hen clients were plentiful) would be able to compete. However, it’s now become clear to me that the massively lower overhead of online market makers will cause the masses to flock to them during the crash instead.
To any real estate agents out there, this isn’t meant as flamebait, but… if you lose your job in the next couple years, don’t wait for it to come back. Spend your time and money learning a new skill. It’ll pay for itself.
7
Markor
// Dec 26, 2007 at 10:35 am
The stock options may not pan out. However, the last two people I know who got hired there started at $110K (sr. database developer) and $105K (new program manager), not counting benefits.
8
femto
// Dec 26, 2007 at 10:39 am
“You can’t beat free, right?”
Actually I think you can, and this may be a case of penny-wise, pound-foolish. An effective marketing program (including a realistic price) is the key to selling a house quickly, and since carrying costs can easily run to the hundreds of dollars per week I think the ~$600 fee charged by places like mls4owners may easily be better than “free”, since it’s likely to generate a lot more traffic to your home.
9
Ira Sacharoff
// Dec 26, 2007 at 10:43 am
I don’t see real estate agents going the way of the dodo.
I use a 7 dollar flat fee stock broker, but there still are plenty of full service brokers out there.
Yes, many real estate agents out there have kind of slit their own throats by being less than honest and less than trustworthy, but some people just aren’t all that comfortable staying on top of market conditions, doing extensive research, doing paperwork, and negotiating.
If I had my druthers, how agents were paid would change dramatically. I’m going to work as hard finding someone a 300,000 dollar house as I am finding someone a million dollar house…why should I get more amply rewarded because I have a richer customer?
Back to the subject, I have nothing against FSBO’s, even if I am an agent. If you feel confident enough to navigate the negotiating and paperwork maze, you can save a lot of money. It might be more stressful, but if you know what you’re doing, you’ll be rewarded.
10
Ubersalad
// Dec 26, 2007 at 11:10 am
Honestly, there ain’t crap for paperwork. But there is a crap load of headache to deal with when it comes to selling anything. Personally I rather not deal with that.
11
Jonny
// Dec 26, 2007 at 11:19 am
As far as I know, MSFT pays top rate right now (well, as of last year anyway). They also have the best benefits on the planet. Literally. Absolutely everything is covered in their medical plan right down to the penny. There are not even any co-pays. And you can refer yourself to any specialist you like. My friends who work there earn well above $100K / yr… in fact, as high as $140K. Not to mention bonuses. Yes, the days of MSFT stock are over, but that company has a gigantic pile of cash and while they may make mediocre software, they do treat their people very well.
12
vboring
// Dec 26, 2007 at 11:24 am
the suggestion was that some real estate agents should leave the practice, not all.
this is fairly obvious. if an industry gets paid for each sale and the number of sales declines, the number of people the industry can support decreases. sales in many parts of the country are at 50% of their peak volume.
so, the pie is smaller.
FSBO may also take some market share from Realtors as people try to get out as much money as possible, but it doesn’t seem too likely to me. banks, those being foreclosed upon, and people selling because of a move will all use Realtors because their goal is to sell the place, not to host open houses.
then again, maybe we’ll have an increase in auctions, which don’t involve Realtors.
13
Markus
// Dec 26, 2007 at 11:31 am
About 12 months ago I was offered a job at both MS and AT&T as program manager. Both companies offered $96K, I went to AT&T thinking they were in a better position; plus the manager at MS seemed a bit flakey…
Also, I bought an sold some properties FSBO, it works fine since we had State Mo & Escow in Kirkland do all of the paperwork for us. However, RE agents will be around just like full-service brokers.
14
New To Seattle
// Dec 26, 2007 at 11:32 am
I don’t know how choicea.com would make a difference given that the RE market is controlled like a cartel. For example, redfin was unsuccessful in its attempt to get into Oregon - IIRC the state realtors association managed to keep them out.
I moved to Seattle recently and have been following the RE market here. During that period prices have declined here, but just a little bit only - 5% or less in the neighborhoods I looked at. For a relocating person like me, there are two problems. Almost every metro area is in a housing slump, so it is a hard sell for my current home. And housing in Seattle is expensive - to put it mildly ;-) So I would lose both ways :-(
About the MSFT euphoria, it is true that they are hiring at a steady pace. But I don’t see how these people can move in and buy a 500K home right away. The salary figures quoted by Markor are accurate (from my 1st and 2nd knowledge of MSFT hiring). But if one buys a 500K home with 20% down, the mortgage/insurance/utilities will eat up more than 50% of one’s pay. I don’t know how many people are comfortable with that (I am not).
15
deejayoh
// Dec 26, 2007 at 11:48 am
I am pretty certain the pay philosophy at Microsoft is to target their pay at 65th percentile in the industry. I’ve hired plenty of people at the pay levels you are talking about and most have taken a pay cut. The way Microsoft got plenty of cash was by not distributing it liberally…
16
David McManus
// Dec 26, 2007 at 12:40 pm
I know that when I interviewed with MSFT in 99 and was offered a job it was around 20% less than the job I ended up going with. There was something about 80 hour weeks and 20% less pay than a job with 40-50 hours a week that didn’t appeal to me.
17
Moe Ronn - Realitor
// Dec 26, 2007 at 12:55 pm
Ira,
I apologize for lumping you into a generalization. I’ve read your posts many times and I feel that you are sincere and trustworthy. Again, I exclude you from my generally negative feeling about agents/brokers.
Moe
18
Kime
// Dec 26, 2007 at 2:36 pm
“I know that when I interviewed with MSFT in 99 and was offered a job it was around 20% less than the job I ended up going with. There was something about 80 hour weeks and 20% less pay than a job with 40-50 hours a week that didn’t appeal to me.”
This is something that is often not mentioned when MSFT pay scale is mentioned: the pay is NOT for a 40 hour week in reality, but for many more hours. I know people who have left Microsoft because they didn’t have any time for their families and they found they could really make more money per actual hours worked somewhere else.
19
Kime
// Dec 26, 2007 at 2:44 pm
“On another note, this Christmas eve I was talking with a concrete guy I know who said that some developments he was working on have been shut down because the builder hasn’t sold any of the houses built so far. This was up in the Mt.Vernon/Arlington area. The builder has apparently lowered the price by 15k on the existing houses but hasn’t had movement. It was amazing to hear a ground zero account of the affect of this whole thing.”
My husband is an electrician who works mostly in Snohomish county and this is exactly the story that began in the last couple of months. Housing construction workers are being laid off and builders are stopping work on some homes in the middle of construction to try to stop losses because they are finding that they can’t sell even at cost, but have to take a loss to get the properties off their hands. I imagine that not all homes are selling at a loss, but some definitely are selling at a loss already.
20
Moe Ronn - Realitor
// Dec 26, 2007 at 2:53 pm
Maybe Ray P over at 500realty.net can come in and buy ALOT of those houses. It sounds just like the deals he’s looking for; RE investments which have already lost, and will continue to loose, value.
Realitor = One whom deals in reality.
21
Curtis
// Dec 26, 2007 at 2:54 pm
Ithink this is a great idea. If FSBO became a widely known site, it would generate enough traffic to compete with MLS listings online. It will take a huge marketing effort to begin with but will be a big pay off in the end.
22
vboring
// Dec 26, 2007 at 3:26 pm
i make beans, but i only actually work about 2 hrs/day, so my pay/hr is fantastic.
eat that, microserfs.
23
Markor
// Dec 26, 2007 at 3:27 pm
Moe Ronn,
On another topic you said:
Now you say:
It should be “lose”, not “loose”. Can we all stop correcting peoples’ grammar and spelling now?
24
Wm Swanson
// Dec 26, 2007 at 3:42 pm
To Markor: Hey! Dont inflate Moe Ronn’s bubble ya hear?!
25
Wm Swanson
// Dec 26, 2007 at 4:02 pm
Edit: Meant “deflate” instead of inflate. Dont have my glasses on.
26
bhs_loves_bluestar
// Dec 26, 2007 at 4:40 pm
“I am pretty certain the pay philosophy at Microsoft is to target their pay at 65th percentile in the industry. I’ve hired plenty of people at the pay levels you are talking about and most have taken a pay cut. The way Microsoft got plenty of cash was by not distributing it liberally…”
paying at the 65th percentile is a good thing… given the average pay is the 50th percentile… MSFT’s goal is to set pay where 65 people in similar jobs in the tech industry are paid less and 35 are paid more… in otherwords above average. And the benefits rock.
27
Ira Sacharoff
// Dec 26, 2007 at 5:02 pm
Moe,
No offense taken. I share your opinion of most agents/brokers.
28
Lake Hills Renter
// Dec 26, 2007 at 8:16 pm
For the record, I work at Microsoft and don’t work more than 40 hours per week. In fact, it is discouraged in my product because the company encourages work/life balance. I also don’t make the $140k/yr that someone quoted — not everyone at Microsoft is a Senior Developer, and the standard developers/testers most certainly don’t make 6 figures. IMO, globalization will keep salaries in check — not so much outsources, althought it will play a part, but H1B.
29
Lake Hills Renter
// Dec 26, 2007 at 8:19 pm
I should say, I *rarely* work more than 40 hours per week, because sometimes it’s necessary, but it’s the exception to the rule and for my team never comes anywhere close to 80 hrs/wk.
30
Moe Ronn - Realitor
// Dec 26, 2007 at 9:30 pm
There is a HUGE difference between an honest typographical error and continuing to use a word which does not exist. Both lose and loose are words, and I do know the difference.
31
stephen
// Dec 27, 2007 at 7:26 am
Whyareyousouptight?
32
rose-colored-coolaid
// Dec 28, 2007 at 11:53 am
I like you Ira, but I do want to pick on this comparison just a little, because I’ve seen it a few times now. This is not really a fair comparison because the markets are extremely different.
The creation of discount brokers actually expands the number of investors in the stock market. The top 1% would be in stocks regardless of whether discount brokers existed. These people have the net worth to pay someone to manage it for them. But what about everybody else? The warehouse worker getting $17 an hour can’t afford to deal through a traditional broker, but he can make a few trades a year at $7 each. In other words, the discount stock broker expands the market. It may take business from traditional brokers as well, but that was not the intent.
The internet technology enabling better FSBO is not creating a newer larger market. A little under 70% of families own their home. It was true in 1990 and it’s true today. The costs of entry are already so large, and the frequency of transaction so low, that it’s inconceivable FSBO could create new buyers/sellers that never existed before. This means that nearly every house sold FSBO is a house no sold by an agent.
I think good honest agents will survive. Some - who change strategies to flat fees or hourly rates for instance - may even thrive. It is more work to do a FSBO, and people do relatively few housing transactions in their lifetime. All of these things will still encourage many sellers to find capable agents. Just not as frequently as 15 years ago. Here’s hoping that most of the chaff is separated quickly.
33
Ira Sacharoff
// Dec 28, 2007 at 1:36 pm
But there are less full service stock brokers than there were five years ago or so, but not less people invested in the market. Doesn’t that suggest that the 7 dollar flat free brokers had an impact on the full service brokers, and didn’t simply expand the market?
I don’t think we’re really disagreeing here. I agree that Redfins and fsbos and online real estate brokers have not allowed people to buy real estate who formerly could, but the subprime loans allowed people to buy homes they formerly couldn’t. Unfortunately, these were not homes that these folks could afford to buy, and way too many are losing them, but just in theory now, discounting all the fraud and shenanigans, if homeowning is a good thing, all things considered, isn’t it a good thing for subprime loans to exist to enable people to buy homes who don’t meet traditional qualifying criteria, but who would be able to make their payments?
I’m not actually sure what I believe on this one, just a little playing devil’s advocate, and curious to hear other’s opinions.
34
Alex
// Dec 28, 2007 at 6:25 pm
Actually, similar thing happened with the travel agents. Some time ago, airlines paid them hefty fees for just selling tickets to the general public. With internet and tools like Orbits or Travelocity, it became much easy to buy tickets directly, so airlines reduced their fees to agents significantly. As a result, a lot of travel agents went out of business. But not all of them. Some still doing very well, providing very personalized full service, not just being middle person in transaction. Information above is based on Edward Yourdon’s book “Outsource: Competing in the Global productivity race”
I believe, there is place for good real estate agent. Not as a person who let me find the home on internet, and just move papers to complete transaction, but as a person who can really understand what I am looking for, actually find it for me, and provide solid advice related to my personal situation. Does it sound unrealistic?
35
Bill MacDonald
// Dec 31, 2007 at 7:11 pm
Alex has it absolutely right. Houses will never be a commodity like pork bellys, computers, or Fords. Every single home is different. For most people, to find a home that they are comfortable with, they appreciate being helped.
36
jon
// Jan 1, 2008 at 10:47 am
It’s hard to see how choicea will compete with zillow. Love em or hate em, those valuations are addictive and draw people to the site. zillow is also map centric, which I like.
choicea has some nice graphic effects, but the long two column list of features made my eyes glaze over. Some way to organize those into related groups might help.
37
keri
// Jan 13, 2008 at 11:21 am
choicea does not compete with zillow (directly), they seem to be providing simply a vertical for the fsbo crowd to list….an improved craigslist. either way, it’s a cool UI and a neat concept. also, they DO have a map feature. I put my house in Bellevue up on the choicea.com site two days ago, already got three emails, and five from craigslist, not bad.
38
t maning
// Feb 9, 2008 at 3:36 pm
I love the concept of ChoiceA.com, just posted !
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