Can the NWMLS Control Online Conversations About Listings?

I linked this up last week on the Twitter account, but the story has been getting enough chit chat online in the last few days that I figure it deserves its own post here.

In news first broken by local REALTOR® Marlow Harris, the NWMLS will apparently be adding two new ways to fine their members via a pair of new fields on the listing input sheets. In essence, new checkboxes have been added to the listing sheet: “buzz off Zillow” and “beat it bloggers.”

What this means is that sellers are now given the option of whether or not Zillow estimates will be allowed to appear on their listings that are posted on NWMLS member sites, and also the option of whether or not NWMLS members are permitted to blog about their listing. For the full official description of the two new listing parameters hit Marlow’s September 25th post for an excerpt from the NWMLS bulletin.

Obviously the point of the first one is obvious. Giving the potential seller an option to prevent Zillow and other “automatic valuation model” price estimates from appearing next to their listing is no doubt something that some sellers and agents have wished for for some time. Despite the fact that Zillow is a completely automated system based on sometimes incorrect inputs, and the company openly admits that their estimates should not be treated as a gold standard, some sellers and seller’s agents have convinced themselves that if a Zillow estimate displayed on the same page as their listing is lower than their asking price, it’s Zillow’s fault if nobody wants to buy their house.

The second option is actually opening up their rules just slightly, as they previously had a blanket prohibition on NWMLS member agents blogging about any listings that were not your own. That’s what the $50,000 fine slapped on Redfin in 2007 was all about. With this new checkbox, sellers will now be able to “opt-in” to blogging.

Not surprisingly, the anti-Zillow move has stirred up some in the industry, especially among those that have had it in for Zillow since day one. Since Zillow is not a member of the NWMLS themselves, insiders there insist that the new rule will have little effect on their business. I have pointed this out when people have asked in the past, but this is a prime example of why I have no interest in Seattle Bubble becoming a member of the NWMLS, even though it would gain me direct access to their database for some prime number-crunching.

In an amusing twist on the whole thing, Marlow followed up her post on these new rules with another angle on the subject yesterday: Can new technology make some MLS rules unenforceable?

It could be that technology will trump all of these new NWMLS rules, and blogging/comments/AVM restrictions will become ineffective and impossible to enforce with the new Google Toolbar application called Sidewiki.

…anyone who installs the Sidewiki will be able to add comments to your real estate webpage, including individual property pages that you may have created to help market your properties.

There is no “opt-out” tab, no way to eliminate the sidebar comments, no way to edit out objectionable material, porn, spam links, comments on the personal character of the sellers or the agent or the home or the neighborhood.

It seems to me that the NWMLS rules are set up to attempt to restrict and stifle as much conversation about listings as possible in a misguided attempt to give the seller absolute control over how their home is “marketed.” Unfortunately for the NWMLS, fancy technology or not, people are free to talk about home listings in real life in whatever way they choose.

If I wanted to start a weekly tour of the most overpriced homes in Seattle, where we drive around town and gather outside homes for sale through the NWMLS and mock the granite countertops and other such faux-luxury “upgrades,” the NWMLS can’t stop me. And once you move the conversation online, it becomes even less possible to control it.

If I wanted to start a website that provided a searchable map of every house for sale on the market, linked to open forum threads on every house where people could say whatever they want about the agent or the home or the neighborhood—again, the NWMLS couldn’t do a thing about it.

The NWMLS can certainly exert control over their members by levying ridiculously large fines for seemingly innocuous conversations, but in my opinion, the more they attempt to stifle and restrict the free flow of information and ideas relating to their precious listings, the more they will encourage another, more open competitor to step up and make their entire system obsolete.

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About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

62 comments:

  1. 1
    wreckingbull says:

    Reminds me of the last death throes we are seeing from the RIAA and MPAA.

    Sooner or later, the NWMLS will be in the same trashcan of history as the National Association of Buggy Whip Salesmen, and the International Brotherhood of Elevator Operators.

  2. 2
    Ray Pepper says:

    “more open competitor to step up and make their entire system obsolete.”

    And thus I continue to wait……………….Its not a matter of if………………………Its when………………The MLS system as we know it WILL collapse and a far better system will emerge involving facilitators, closing reps, and all powered by a large search engine such as Google or MSFT.

    Nearly 8 years ago Google had a vision of the future of real estate that will emerge at some point. It will terminate the 500 Realty, MLS 4 OWNERS, and Red Fin type models of real estate. However, what will emerge will be a far superior way to buy/sell homes and at a cost that will make us all look back at the insanity of 6% and we will shake our heads that it went on so long.

    I can hardly wait…….

  3. 3
    grumble says:

    Lack of information and inefficiencies is what drives profits in many industries. Look at how buying stocks has changed with the advent of online brokerages – it used to cost hundreds of dollars in commissions to buy stocks, and now is $10 on etrade. Albeit, not an ideal example, but it gives the general idea.

    The blatant attempt by the MLS to hang onto their unjustifiable commission structure and throwing up additional barriers to entry is a sad state of affairs.

  4. 4
    Kary L. Krismer says:

    Much To Do About Nothing–especially since The Tim admits the second rule is actually loosening things up. I had to debate that with Marlow on her site.

    I doubt many agents (or sellers) will opt out of the Zillow, and I doubt many will authorize blogging, so next to nothing will change. Also, even for those that authorize blogging, no agents are going to bother to look for the authorization just so they can discuss a listing. Again, nothing will change.

    At best (or worst) this will probably affect the design of NWMLS members’ websites.

  5. 5
    Kary L. Krismer says:

    By grumble @ 3:

    Lack of information and inefficiencies is what drives profits in many industries. Look at how buying stocks has changed with the advent of online brokerages – it used to cost hundreds of dollars in commissions to buy stocks, and now is $10 on etrade. Albeit, not an ideal example, but it gives the general idea.

    You’re right, not a good example at all. Buying a stock only requires that you click a link on a website. If you can transfer money between accounts on-line, or pay a credit card bill on-line, you can buy a stock. (Note that doesn’t mean you will make money off the stock.)

    I’m not sure who you (and Ray) think the information necessary to buy a house is going to suddenly be injected into the heads of potential home-buyers. Even the best educated most experienced clients have a lot of questions. Even quasi-institutional type sellers use agents–ones that sell multiple properties per year.

  6. 6
    Kary L. Krismer says:

    Here’s a better analogy. Filing bankruptcy. Yes the forms are relatively easy, and someone with reasonably high intelligence could fill them out, etc. But they’re also very likely to make very costly mistakes, not realizing certain issues even exist. When I was first starting bankruptcy someone said to me that you could have whale sized issues swimming around that you had no idea existed, and that pretty well describes it.

    Back when I was practicing law two of the biggest issues were whether a bankruptcy was necessary, and if so, when to file a bankruptcy. Even people calling who had obviously done some research on bankruptcy had little/no idea on either of those issues.

    Anyway, buying or selling a house is somewhat as complicated, and also an area where experience is key. Yes you can do either yourself, but that doesn’t mean you’ll do them to the best result.

    Oh, finally, it’s also an area where you need to be somewhat careful about who you select to help you. In the bankruptcy area there are attorneys that just file anyone at anytime, in order to bring in the fees as soon as possible. I’m sure there are agents that do similar things, like not pointing clients away from potentially problematic properties.

  7. 7
    David Losh says:

    It does seem to me that the NWMLS is targeting internet business models. It is a shameless attempt to go after redfin and Zillow. It only adds credibility to Glenn’s claim that the Real Estate industry is out to get him. I don’t really understand the Rain City Guide, but I think the home search function allows comments.

    There is a lot of bad information on the internet and it should be called out.

    This is where the entertainment value is, but not the substance.

    I’m keeping in mind the bottom calling this year and the sales that created. Now we’ll have The Tim caravan to over priced listings. Next it will be what colors we like in listing photos.

    Though the NWMLS has made matters worse once again, they are trying to do something about the side show antics of the internet. Of course it will never work, but it is something for the membership to deal with.

  8. 8
    Kary L. Krismer says:

    RE: David Losh @ 7 – David, how is loosening and clarifying the blogging rule making things worse for Redfin?

  9. 9
    Ray Pepper says:

    RE: Kary L. Krismer @ 5

    Kary, you should be happy to know that if you market/position yourself properly you will have a key role in the NEW era of real estate. Real Estate Agents will have a greatly diminished role and I forsee the 30k+ diminishing to 3000 in a decade . Needless to say the NAR will fold 2 years before the collapse of the MLS.

    Transaction Adminstrator- Facilitator- Closer.>>>>>> Will be the future of real estate. Title/Escrow will not continue to exist in its present form and say goodbye to Chicago, Old Republic, Talon, Ticor, and the rest. Title/Escrow will be driven by the transaction administrator and both Buyers and Sellers will be serviced by Facilitators acting in a neutral status for Buyer and Seller.

    Kary your services will encompany the Closer role while being the supervisor of all 3 roles.

    Its a very simple model of real estate and each year that goes by we get closer.

    The buffet is coming to an end!

  10. 10
    Acerun says:

    “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.” ~ Charles Darwin

    Eventually the MLS could easily be replaced by new technology. Remember when people actually used travel agents to purchase an airline ticket or insurance agents to buy car insurance? There will be a need for help with complex transactions but real estate agents may be not relevant before to long.

  11. 11
    Tina says:

    I see the DOJ waiting in the wings, licking their lips. We are so close to not even needing the MLS as it currently stands. Tactics like this just make me hope for the future to hurry up an get here. Oh, and by the way, I’m a real estate agent :)

    Tina in Virginia

  12. 12
    patient says:

    The internets appeal is a lot about access to information and convinience. If you try to go against that you will loose. A much better way is to be better than your antagonists. It is for example only the listing agent that have direct access to the seller and thereby have access to most information of the property and it’s virtues. So when buyers now have made it clear that they want an independent estimate of the price while searching for properties the listing agency should add the popular estimates like zestimates to their site and make a spiel for why the property is listed above or below the estimate. They can also open a discussion forum where the agent and perhaps even the seller can participate, in that way the buyer can get information directly from the source. This is how you compete on th internet not by being protectionistic about information flow.

  13. 13
    Tyler says:

    The Tim — Could you actually join the NWMLS? I thought that you had to be a broker?

    Like I have been saying over the past few months — once virtual tour technologies get good enough (and cheap enough) to where potential buyers only need to visit the 2-3 homes that they actually want, the world of real estate is going to be vastly different.

    Realtors literally buy you access to: 1) MLS and 2) The physical structure and 3) their experience/knowledge.

    People who list their home on our site (FSBO) still get good exposure without the MLS. Our listings are heavily dispersed and even show up on Redfin. The internet is great for dispersing information. The only time it gets blocked is when organizations like the NWMLS try to stop it. For example, Zillow doesn’t consume our listing feed b/c of who pays their bills.

    Once people can get virtual-access to a home, that actually represents the home, then the 2nd thing that Realtors buy you becomes less valuable.

    For the third leg of knowledge, a real estate lawyer is a pretty good deal compared to 2-3%.

  14. 14
    wreckingbull says:

    RE: Kary L. Krismer @ 6 – This is where you completely lose me. Yes, experts are very important in the transaction. For me, this means

    1. RE Attorney
    2. Home Inspector
    3. Appraiser
    4. Escrow/Title Agent

    Real estate agents never brought much to the table in my past transactions, yet with their limited training and licensing, they were skimming a lion’s share of the transaction fees.

    I don’t think I would use one again unless it is in a vastly diminished role.

    Lastly, I find it fair to say that “costly mistakes” has indeed been the main business of real estate agents recently.

  15. 15
    Scott Weitz says:

    THE TIM,

    You should look into Drop Bids on Foreclosures right now!! Some of these bids are staggering…if they are an indication of where the market is headed, we have a long way to go to reach bottom.

  16. 16
    SeattleMoose says:

    Agree with Post 1 by Wrecking Bull…..a sinking ship industry.

    Covering the portholes will not change anything.

    The information revolution is destroying the old information “priesthoods”, useless middlemen, and transaction parasites.

    Good riddance!!!

  17. 17
    David Losh says:

    RE: Tina @ 11

    I like Tina!

    When the market started heating up any moron off the street could write up a deal, have a sale, it would close and the moron would get paid. Brokerages loved it because they didn’t have to deal with people like me. I’m a prima donna.

    So we have been stuck with escalating prices and morons writing deals. Every body got hurt in the process.

    Now the internet says we can replace the morons with lower paid morons and that will fix it.

    This past selling season is a good indication that the internet isn’t going to fix anything. Domestic travel and the higher prices we pay for that should be an example.

    The future will be more consultants. People will pay a fee for services. Real Estate is a service industry.

  18. 18
    Greg Perry says:

    I know of several examples of inacurate blogging that hurt Seller’s interest. For instance, agent put in her comments, “not a fixer”. The blogging company had their filters set for “fixers”, and actually blogged the listing as a fixer. One listing agent found this out as they had visitor come in off the street wondering why the lisitng was misrepresented in the blog as a fixer. Further research found several examples of this. The property was grossly misrepresented by the blogging company.

    This clearly hurts the Seller’s position AND wastes the buyers time. The way the new rule works now is the agent can opt in or out of third party blogging, thus maintaining some marketing control. I also think the blogging company must assume responsibility for accuracy. Misrepresentations should be fined. Blogging companies should be the ones assuming the risk.

    This is an opt in, opt out program. This is not mandatory. The listing company/agent should have this control of thier marketing.

  19. 19
    The Tim says:

    RE: Greg Perry @ 18 – What the heck is a “blogging company” and how is it used by real estate salespeople?

  20. 20
    Greg Perry says:

    …and for those “convinced” that the full service brokerage is a dying breed, NAR stats show that full service companiess increased market share in 2008. Also, here is the 2008 rankings as printed in the Puget Sound Business Journal in September:

    Residential Sales Volume 2008

    Top 10

    1. Windermere – $20,945.95M
    2. John L Scott – $5,182.68M
    3. Coldwell Banker Bain – $3,615.01M
    4. Re/Max International – $3,573.17M
    5. Prudential Real Estate – $1,183.79M
    6. Ewing & Clark, Inc. – $765.4M
    7. Solution Partners NW-Windermere – $356.62M
    8. Redfin – $282.93M
    9. Better Homes and Gardens Real Estate Executive – $227.80
    10. Lake & Company – $217.12M

    Volume drops dramatically after the top 10 with Gerrard Beattie & Knapp coming in 11th place with $99.88M

    FWIW, Windermere’s volume in 2006 (a bubble year) was 23,709.00M). In 2008, Windermere’s market share increased.

  21. 21
    Greg Perry says:

    By The Tim @ 19:

    RE: Greg Perry @ 18 – What the heck is a “blogging company” and how is it used by real estate salespeople?

    The “blogging” company in the above example was Redfin. The “not a fixer” properties were being represented as “fixers”.

  22. 22
    wreckingbull says:

    RE: Greg Perry @ 20 – What was the percentage increase in market share of full-service vs. discount service? I don’t see that in your post.

  23. 23
    Jillayne says:

    Hey Scott Weitz,

    What kind of drop bids are you seeing right now and where? King, Snohomish, Pierce and what percentage?

    Is it all lenders across the board or are Fannie and Freddie still setting the opening bid at the payoff?

    Thanks.

  24. 24
    b says:

    RE: Greg Perry @ 18
    Do you think that list will look remotely the same 10 years from now? If you are not looking 5-10 years in the future at the technological landscape then you are not dying, you are already dead. Five years in internet-time is enough to put everyone in a particular industry (not just RE) out of business. I am not saying RedFin will be the top of the heap at that time, I do not think they have “nailed” the full experience yet. But it is obvious that someone out there will nail it and sooner rather than later.

  25. 25
    Greg Perry says:

    RE: b @ 24
    The internet frustrates those who want to reduce real estate to a “simple” transaction to no end. Real estate is too complicated and too litigious to reduce to a simple transaction. Finding a house is an important part to a normal transaction, but it’s just a part.

    When markets heat up, the discounters come. When markets cool, they go away. It’s easier for me to get a higher commission right now than any time in 2005 or 2006.

    I don’t see where technology will replace expertise in real estate. I just spent 3 hours in an advanced title theory class on many issues including waterfront. There has been may changes in title policies in the last 3-4 years. Also, technology will never be able to explain functional or economic obsolescence problems for a specific property to buyer wanting to make a good decision.

    The bottom line is that those who think the real estate markets will remain “bearish”, will also find that alternative and discount brokerages will not likely thrive. Here’s a hint…..profit = survival.

    Some will “do it yourself”. I say go for it. Others simply don’t have the time to study and research and will pay for service. No worries here.

  26. 26
    Ray Pepper says:

    RE: Greg Perry @ 25

    Greg, I was going to go into my lecture in an attempt to educate you but instead I went to your website and your video says it all………………..

    http://www.425realty.com/realestate/2009/08/introducing-the-million-dollar-challenge.html

    I truly thought I would not hear the phrase “Now is the perfect time to buy a home” for at least a another year but I was mistaken.

    Can’t we agents PLEASE think of another catch phrase! Millions of Americans who were told that very phrase not 3 years ago have lost their homes, are in foreclosure, short sale, or somewhere in the bankruptcy process.

    GOOD LORD!~

  27. 27
    One Eyed Man says:

    RE: Greg Perry @ 25

    Greg, I agree with most if not all of what you say. But I think there are a couple of things that you’re not taking into account. From what I know about you, you are far from being the average agent. Your skills and knowledge base probably put you in at least the top few percent if not the top one percent. The business of being a real estate agent is a low barriers to entry business and the average agent doesn’t possess anywhere near the skills that you do. While I agree that you can’t be replaced by a one size fits all alternative (say perhaps a technology assisted FSBO alternative perhaps combining attorney’s with a low cost listing service like Craig’s list) it isn’t out of the relm of possibility that the average rank and file agent could be.

    I’m not saying that it’s going to happen. But I’m also not sure that it won’t. I don’t think Redfin will overtake the larger full service brokerages. But I’m not so sure that there isn’t a better model that can reduce transaction costs while still providing a quality service on par with current full service brokerages.

  28. 28
    Greg Perry says:

    RE: One Eyed Man @ 27

    Agent counts doubled between 2002 and 2007, now they’re on the way back down. I agree that the entry barrier needs to be higher At any rate the market is weeding out many of those looking for the quick buck.

    I’ve always been in favor of consumer choice. That choice includes a top dollar full service agent.

    I think we can agree that sometimes the market gives and sometimes it takes.

  29. 29
    Greg Perry says:

    RE: Ray Pepper @ 26

    Well, quite a few buyers must think that it’s a pretty good time to buy. The week before was 2nd best pending sale count in King County since July 2007 (median peak).

    Did you see where interest rates were Thursday and Friday?

    I’ve been slacking with 1/2 days lately. Day starts at 7am to go to 8pm, and I get to work Saturday! Let me know when it’s football season.

  30. 30
    cheapseats says:

    RE: Greg Perry @ 29 – So your logic is, lots of people are doing it, so it must be a good time to buy?

  31. 31
    what goes up must come down says:

    greg, how did you end up on your prediction for sales in July, I can’t recall.

  32. 32

    I guess blogging company must be associated with SEO and doing online marketing for the real estate businesses. It’s a booming business in itself these days.

  33. 33
    Ray Pepper says:

    RE: Greg Perry @ 29

    Greg, how many homes have you SOLD this year? For someone so busy working such long days I’m sure you have been making a killing.

    Personally, I have only sold 10 in Washington State (and 4 pending) with nearly 40 Pre-Approved clients out looking and most deciding to wait until they find that GEM!

    I would never EVER tell any of them its the perfect time to Buy because rates are low and there is 8000 to be had. Our Buyer will decide when the perfect time to Buy is.

    Heck, if rates go up get the seller to Buy down our clients rate! I never use rates as any indicator of what people SHOULD do. As for hurry up the 8000 is ending………….Please Greg.

    In all due respect, the Public is smarter then you think. They have seen the rhetoric before but the difference is…………. this time…………..they REMEMBER!

  34. 34
    Ray Pepper says:

    You know Greg, just one last comment before my girls soccer team “The Q Tips” take the field at 9am in an effort to win our 1st game(0-3)! uggh..

    Imagine all those Buyers as you stated above from Windermere, JLS, ReMax, CBB, and Prudential gathered into one giant venue like the Key Arena.

    Then the neutral speaker takes the stage with a giant chalk board televised over multiple large screens..

    Then the Speaker explains the Conventional Model of Buying Real Estate as conducted in the top 5 Brokerages above and the Model of 500 Realty/Red Fin/Shop Prop/Findwell/Handspring………

    Then the speaker concludes his neutral presentation.

    The masses leave after having been educated.

    What do you think will happen to the numbers listed above?

    You see Greg, the public is not stupid. However, sometimes it takes a very long time for them to understand.

  35. 35
    Greg Perry says:

    RE: Ray Pepper @ 33

    Yup. I agree. That’s what we did at our seminar. Present the facts. Brought in a neutral party to talk about the economy (Jim Hebert, Hebert research) and let people make their minds up for themselves!

    As for selling your brokerage model that’s up for you to do. You have your opinion. If I were not in the real estate industry, your model would not appeal to me Whenever I make a purchase for a product or a service, I look for a top professional and I pay them. The professional is absorbed within his/her industry and I generally know just enough about THEIR industry to get myself in trouble. You see, we don’t know what we don’t know. The complex title theory class I took on Thursday proved that one to me, yet again.

    Some people just LOVE to jump over $100 bills to pick up nickels. Make one little mistake in real estate transaction (location, obsolescence, value, encroachment, defective product on home) and the $100 bill could turn into a $1000 bill. Personally, I think that most DIY or discount programs in real estate have a much greater chance to harm the consumer way beyond the small savings in the procurement commission.

    That being said, I adamantly support the consumers right to CHOOSE. And I absolutely agree with you that the public votes with their actions. Redfin, hands down, has the best technology at this point for buyers on the internet. For all the money spent on this technology, they are losing market share ground to Windermere. My buyers use them all the time. At this point, none of my clients has one of your t shirts, yet.

    So what are buyers looking for?

    From NAR:
    A few short years ago, Web marketers and real estate pundits declared that the Web would virtually eliminate the need for real estate agents. In fact, the opposite has occurred. In 2001, 69 percent of all buyer purchased their home through a real estate agent. In 2008, that number was 81 percent.

    So, what are buyers looking for in a real estate agent? Interesting enough, only 48 percent indicated their top reason for working with an agent was to find the right home. The top three areas of what buyers perceived as beneficial were:

    1. Helping the buyer to understand the purchase process.
    2. Pointing out unnoticed faults or features.
    3. Negotiating better terms.

    (From 2008 NAR Profile of Home Buyers and Sellers)

    If you study the top 10 puget sound brokers, you’ll find that positions 2-10 do not add up to Windermere’s volume and position #7 was a stand alone Windermere builder services office. The top 5 positions most likely account for over 80% of market share.

    The bottom line is that when markets are hot and real estate is easier, more agents and more choices are created. When the markets roll back, the discounters are hurt the worst because the discount model totally relies on volume. No profit=no longevity in business. (By the way, we also lost a lot of big box retailers in this recession).

    Again I emphasize. For those who want to do it yourself, or partially do it yourself to save money on commission, I say great! That is your right and privilege and you should have choices. We all have our individual dreams, wants, needs and experience levels. One size does not fit all. I wish your model well.

  36. 36
    Greg Perry says:

    By cheapseats @ 30:

    RE: Greg Perry @ 29 – So your logic is, lots of people are doing it, so it must be a good time to buy?

    No not all. Volume is better, but that’s not a reason to buy.

    I think there are many unique advantages to buying right now The lowest interest rates in history. Homes that ave backed off close to 25% form the peak. And an unprecedented tax credit from the government. I believe that real estate is an important cornerstone in building a high personal net worth over time.

    I heard some great perspectives from Jim Hebert, founder of Hebert research last weekend. At the end of the month, our office is hosting a private evening with Matthew Gardner (local economist) for our clients.

    Yes, I think we have some unique opportunities. Everyone needs to evaluate opportunities for themselves, so I won’t be offended if you don’t agree.

  37. 37
    Kary L. Krismer says:

    By wreckingbull @ 14:

    RE: Kary L. Krismer @ 6 – This is where you completely lose me. Yes, experts are very important in the transaction. For me, this means

    1. RE Attorney
    2. Home Inspector
    3. Appraiser
    4. Escrow/Title Agent

    Real estate agents never brought much to the table in my past transactions, yet with their limited training and licensing, they were skimming a lion’s share of the transaction fees..

    None of the people you mention there help you with the most important thing. Helping you select the proper house, or can give you the slightest idea what to offer before you make an offer. Also, the agent does much of what the attorney would do, although I’ll admit most don’t know that area as well as an attorney.

  38. 38
    Kary L. Krismer says:

    The people who think technology will replace what agents do simply don’t know what they don’t know.

    They also think that arranging a trip to Disneyland is somehow the same as buying a piece of real property. That’s the funniest argument anyone here makes.

  39. 39
    Greg Perry says:

    By what goes up must come down @ 31:

    greg, how did you end up on your prediction for sales in July, I can’t recall.

    Well, earlier I predicted 2000 closings, but if you go back and research, you’ll find that well before July numbers came out I realized that because the increase in pendings started so late in the year in 2009, I backed off the July deadline.

    I did say for the record that we should have 2000 in a month in 2009 and said somewhat tongue in cheek the month will be NOVEMBER. (patient loved that one)

    The week before last we had the 2nd highest pending count since July 2007 and the pending counts have been strong for several weeks. Buyers won’t be jumping on the short sales so they can get the homes closed before the end of the tax credit so better inventory will be going under contract. Appraisal issues are starting to level out and I’m seeing examples of homes going through the lending process easier.

    Yes, I still think we will see 2000 in 2009. July is traditionally the biggest month for closings, but will it be this year?

  40. 40
    David Losh says:

    RE: Greg Perry @ 34

    Greg your comment here illustrates the problem most buyers have with a Real Estate transaction. They do go to seminars to get “educated,” or they listen to any number of sales pitches.

    Real Estate has a value as a housing unit and some intrinsic values. An agent should know the value. People should buy based on price rather than terms. You only need to read the news paper to know prices are going down.

    The problem with the chart and all those people who were sold properties this year by agents is that they will lose between 10% to 30% in value between now and 2011. Those that went to the foreclosure sales seminar may be the most gullible, but hey, they got professional advice.

    Professional means you get paid. A man or women who will sleep with any one they meet in a bar is a….., but once they get paid they are a professional.

    By now you all know my formula for making Real Estate offers. Potential rental income is the value. What you may not know is that every Real Estate professional does know the true value of a property but wants to sell that property to you for a price much higher than the value.

    Real Estate agents claim there is no crystal ball, but they sure as heck should know the value.

    What’s going to happen is that one day in the next two years the consumer, the public, will ask for service and remember the big companies didn’t provide that. Big companies like granite counter tops in the office.

    Now the internet may be a great thing but look at the graph in the post. Yes price per square foot came down from $320 to $260 but that isn’t telling you anything about value. If the price per square foot drops back to $230 is that a buy signal?

    The internet is a lead generator. People get swindled by the internet as much if not much more than dealing with an agent. We have not found a solution here.

  41. 41
    AMS says:

    RE: Kary L. Krismer @ 36 – “Also, the agent does much of what the attorney would do, although I’ll admit most don’t know that area as well as an attorney.”

    Once again I must admit, 99%+ transactions go on without a problem. Could they have been better? Maybe.

    I had a friend who paid some hefty income taxes that could have been avoided. He didn’t seek the right advice before the deals were done. Did his transaction happen without a problem? Yes, I suppose. Could he have done better? Definitely.

    This gets back to your comments on the “do it yourself” bankruptcy. Yes, maybe you can get through the system, but an attorney has the harpoon and knows when and how to use it in the event that whale of an issue is present.

    This sort of reminds me of the line, “You cannot get pregnant the first time.” For most it is not a problem, but for the others, I must ask if it was worth the risk.

  42. 42
    Kary L. Krismer says:

    RE: AMS @ 40 – That actually brings up a good point. I’m more inclined to refer people to accountants for tax issues related to property transactions, rather than attorneys. Using an example, I’ve found divorce attorneys are less likely to know tax issues pertaining to divorce than are accountants.

    Oh, and like real estate agents, accountants are not typically attorneys.

  43. 43
    AMS says:

    RE: Kary L. Krismer @ 41 – There are three people I consider for tax issues:

    1. CPA (These are licensed by the state, and they can represent people before the IRS, but not in court)
    2. Enrolled Agents (These are qualified by the IRS, and they can also represent people before the IRS, but not in court)
    3. Real finance people who do not fit one of the above categories. An example is a CFA. I am not so interested in anyone who sells financial products, nor am I interested in the wanna be finance people–there sure are a lot of sharks in the sea.

    CPAs and Enrolled Agents are excellent for tax specific questions. Often the Enrolled Agents are better equipped than a CPA that does a lot of financial statement work. Enrolled agents are not as skilled at creating financial statements. These two are excellent at the front-line maneuvering.

    The third category is about strategy. Have you ever heard about the CPA who suggested borrowing more and moving up to the bigger house to maximize the interest tax deduction? Sure he is 100% correct, but is that a good financial strategy? As always, CPAs are not all equal, and there are many very skilled CPAs.

    Finally there is the observation of Sun Tzu. Tzu suggested that the ability of troops to follow the command will determine the success of the strategy, or something similar, I am going by memory here. This is so true in divorce cases. The attorney says to the client, “If you do X, then bad things will happen.” So the client runs right out and does X. Let’s see, you pay for good advice, and you run out and do exactly what should not be done?

    People do similar things in finance. If you go do this, bad things will happen. For example, if you go buy a car that has a value equal to your annual income, it will not be good for your financial health. So what happens? A more expensive car is purchased.

    And the beat goes on…

  44. 44
    wreckingbull says:

    RE: Kary L. Krismer @ 37 – I don’t think anyone is saying agents will go away. I think many of us are saying the 6% model coupled with an NWMLS information stranglehold will dissolve into oblivion. If companies like Windermere and John L. Scott can adapt, more power to them.

  45. 45
    Ray Pepper says:

    RE: Greg Perry @ 34

    Greg, you did not answer a few of my questions so I will not bring them up again out of respect for you and your family.

    ” Yup. I agree. That’s what we did at our seminar. Present the facts. Brought in a neutral party to talk about the economy (Jim Hebert, Hebert research) and let people make their minds up for themselves! ”

    I do not believe you present ALL the facts. You gladly advise clients to seek their 8000 before the time expires yet you do NOT offer alternatives to the Buyers how they can EARN far more by simply assisting the Agent looking for their home. You see Greg, I’m full service as much as you are, however- I want the Buyer to assist me in looking for their home. In turn, I pay them. They know what they want far more then I do!

    They do NOT want to drive with me in my car searching. They want to do it on their own but need assistance in getting into the homes. In addition they need assistance and education in all the dynamics associated with the Deal including offer/counter-offer, and all the variables that come into play when buying a home. This is a wide spectrum that includes what should they offer? Inspection? Representation? Everything! We do exactly what you do but we want the Buyers to do the hardest part—————FIND THEIR HOME! Thats why they deserve the 75% They did the hardest part!

    We can go on and on. I have been educating conventional Agents for years with everyday transactions. Slowly but surely they are starting to get it. Some Agents never contact me directly but only by email because of their incessant need to be RUDE. But, thats ok.

    YOUR Conventional Model of Real Estate and the Model of 500 Realty/Red Fin will go away in time but I will tell you this…………….What emerges will be so much superior and consumer friendly that AGAIN we will all look back and laugh at this 6% charade…………

    Until then we will continue to offer the BEST DEAL YOU WILL FIND for Consumers who are fortunate enough to have been educated.

  46. 46
    Greg Perry says:

    By Ray Pepper @ 44:

    RE: Greg Perry @ 34

    Ray, Ray, Ray,

    “I do not believe you present ALL the facts. You gladly advise clients to seek their 8000 before the time expires yet you do NOT offer alternatives to the Buyers how they can EARN far more by simply assisting the Agent looking for their home. You see Greg, I’m full service as much as you are, however- I want the Buyer to assist me in looking for their home. In turn, I pay them. They know what they want far more then I do! ”

    You are so focussed on your clients saving their nickels. You silly guy, they can go out with you, save their nickels AND get that $8,000 tax credit because they know what they want! They’ll get the best of all worlds! Awesome! If it works for you and it works for them great! I think your model IS good for some…..

    And here’s the $200,000 question:
    Also at our seminar, Eric Campbell, president of Cam West homes showed examples from the early ’60’s where a buyer could buy a home in the Lake Hills area of Bellevue and Fairwood in Renton for virtually the exact same price. Today, that Lake Hills home is worth about $200k more. Why? Both are good areas.

    Hmmm. Your paradigm is that
    “we want the Buyers to do the hardest part—————FIND THEIR HOME! Thats why they deserve the 75% They did the hardest part!”

    I absolutely do not agree with this. This is one of the parts of the process. Often, many parts of the process are much more difficult than finding the home. AND, often I spend a lot of time talking clients out of buying homes they are initially attracted to. Left to their best emotional thinking, many buyers will get themselves in a peck of trouble.

    Ray, the client you want and the client I want are very, very different. I don’t want to make every person think that they need to use an agent like me. Why do you try to convince the world that every buyer should use your model?

  47. 47
    mukoh says:

    RE: Ray Pepper @ 34 – So Ray the model would be something like from your own words: “We have a bunch of veterans who are doing this for fun, they don’t really look at it as business, just fun in their retirement to handle a $300k deal for you for only 25% of a regular fee”.

    Its kind of like an accountant. I would never trust one that screams I will do your taxes for cheaper then ANYONE!!!. Come to me NOW!!!, I don’t need the business or money from it I DO IT FOR FUN!!!!

  48. 48
    Ray Pepper says:

    RE: mukoh @ 47

    No Mukoh. As usual you bring nothing to the table. So you are not worthy of a response.

    “Ray, the client you want and the client I want are very, very different. I don’t want to make every person think that they need to use an agent like me. Why do you try to convince the world that every buyer should use your model?”

    Greg, because we do the same job as you! I doubt you cart people around in your car to show them homes. I believe you send emails out. The Buyer deserves/needs this money NOW more then ever. We educate every buyer of what they should/should not do as well. But, in the end its their decision.

    Greg, I respect your opinion but I also know that each and every Agent knows the truth about real estate. They all know this 3% to LIST and 3% to help a Buyer find a home is a SHAM. I don’t need to tell you this, your too smart and already know it.

    Google envisioned the future of Real Estate long before I did. Their model they have brought forward I embraced since day 1. When it gets rolled out 500 Realty/Red Fin, JLS, RE/MAX, CBB, and WIND will demise within 24 months. The MLS system is getting closer and closer to extinction each month that goes by.

    Until, then Greg you and I must still work and I wish you luck going forward!

  49. 49
    mukoh says:

    RE: Ray Pepper @ 48 – Ok sorry. Don’t bring as much as dinosaurs oops “veterans”. Sorry typing this from Maui beach side. :)

    Your model has failed enough times to have its future spelled out. Just look at sutton. :) Dale had a great run even tv ads, in the end it is a fun little deal for dinosaurs who think they are changing something to have had a lot of fun. :) Enjoy the weather. I sure am.

  50. 50
    Greg Perry says:

    RE: Ray Pepper @ 48

    “Greg, because we do the same job as you! I doubt you cart people around in your car to show them homes. I believe you send emails out. The Buyer deserves/needs this money NOW more then ever. We educate every buyer of what they should/should not do as well. But, in the end its their decision.”

    We absolutely cart people in our car! In fact at times we still preview prior to showing! The side by side comparison is one way our buyers determine value.

  51. 51
    Kary L. Krismer says:

    By wreckingbull @ 44:

    RE: Kary L. Krismer @ 37 – I don’t think anyone is saying agents will go away. I think many of us are saying the 6% model coupled with an NWMLS information stranglehold will dissolve into oblivion. If companies like Windermere and John L. Scott can adapt, more power to them.

    What information stranglehold? Who do you think is providing consumers the information on listings?

    Some stuff might be hidden, but that is slowly changing on some things (e.g. DOM), but won’t on others (owner name and phone number.)

    What amazes me is people think the model will change because people now get it off a computer instead of a newspaper. It’s not like the NWMLS is opposed to it being easier and cheaper for people to get information on listings.

  52. 52
    Kary L. Krismer says:

    RE: Greg Perry @ 50 – I’m embarrassed when we can’t preview properties prior to showing them, but often time constraints simply don’t allow that. Typically only 20-50% of listings are actually shown.

    Maybe Ray’s clients don’t value their time much. ;-)

  53. 53
    Ray Pepper says:

    RE: mukoh @ 49

    Enjoy the weather? Kind of drab out. I was stuck in a mob scene at Ikea after my daughters team got ripped 14-4 in soccer and then I had to endure that place.

    Mukoh, I apologize for being so cranky and if you would have met me at Ikea I would have bought You, Greg, and Kary the meatballs in a cup. No insult intended, they are actually pretty good and I had 10 while trying to hear the Husky Game.

    Maybe Ray’s clients don’t value their time much. ;-) >>>>> Could be…………..

    “We absolutely cart people in our car! In fact at times we still preview prior to showing! The side by side comparison is one way our buyers determine value.”

    Greg, you are correct. We are different. I will place no Buyer in my car unless theirs breaks down on a tour. We also do not Preview.

    If I find any buyers that demands to be driven around I will surely send them your way.

  54. 54
    David Losh says:

    Let’s try this again, because it seems to be getting lost in all the great business plans for Real Estate in the future.

    The internet has a lot of hype and disinformation. People talk about expedia like it’s a great thing. In my opinion it’s a complete rip off. My family and I spend more time figuring out the trips, spend more for hotel rooms, then get on some over crowded flight where we can buy a sandwich.

    The post is about the NWMLS and it’s attempts to curtail internet business models for Real Estate. They can’t, but the consumer can choose better alternatives.

    I say let people look at listings on line and comment. Who cares? If you are a serious buyer you look by location, you make your own choices, no body can tell you anything. At the same time I think there should be some respect for people who are just trying to do the right thing for themselves and their families.

    Let’s start with the selling price is set by the buyer. What a buyer is willing to pay and what a seller will accept determines the selling price. So whining about high prices is ridiculous. If you don’t like the price make an offer.

    Make the agent work for the commission.

    There again I think the real future will be consultants, paid by the hour, to give guidance.

  55. 55
    mukoh says:

    RE: Ray Pepper @ 53 – I love IKEA meatballs. Wife gets them for me every time she is in that place referred to as south of the pit. The weather here was 85 all day nice and sunny.

    I wasn’t trying to be cranky too. Just pointing out some things from my view.

  56. 56

    RE: Greg Perry @ 18

    It’s easy to say “say WTF you want about anyone’s property” and let’s put it online for everyone to see.

    I’m cool with that, so long as it’s true.

    But what if what’s said is untrue or misleading– like a misleading zestimate (Spencer Rascoff in the comment to this post said an inaccurate zestimate can be misleading: http://bit.ly/323D0S

    or a blog post that says your crappy house has termites (when it doesn’t). [BTW, saying crappy is OK]

    These factual untruths hurt the home seller (and possibly future homeowner) and wastes buyers’ time….
    and hopefully gets your dumbass sued and crying on your lawyer’s shoulder when the judge bitch slaps you for a few mil…. [cut to plaintiff laughing and thanking Google for preserving your irresponsible WTF-ness]

    Just this fella’s opinion.

  57. 57

    I was supporting Greg Perry in previous comment.

  58. 58
    jf.sellsius says:

    @The Tim

    “If I wanted to start a weekly tour of the most overpriced homes in Seattle, where we drive around town and gather outside homes for sale through the NWMLS and mock the granite countertops and other such faux-luxury “upgrades.”

    But would you walk in front of an open house with a sign that says “the zestimate on this house is $50,000 less than the asking price.” (when you know the zestimate is dead wrong)? Of course not. Now you know why I support the opt-out of AVM.

  59. 59
    Kary L. Krismer says:

    Those of you with Firefox should download the latest Google Toolbar (beta), and then check out Sidewiki on this thread. ;-)

    (Uninstall and reinstall if you don’t have the latest version–6.1.2.somethingorother).

  60. 60
    grumble says:

    I think it comes down to a matter of the expertise involved. In a bankruptcy, a lawyer has gone through law school, passed the bar – they have significant training and liability. What training does a typical realtor have that gives us confidence that they are a subject matter expert? Do they deserve a $15k paycheck for 100 hours (or much less during the boom years) of work?

    You were an attorney – why did you switch to being a realtor? More money in it and easier work? :)

    By Kary L. Krismer @ 6:

    Here’s a better analogy. Filing bankruptcy. Yes the forms are relatively easy, and someone with reasonably high intelligence could fill them out, etc. But they’re also very likely to make very costly mistakes, not realizing certain issues even exist. When I was first starting bankruptcy someone said to me that you could have whale sized issues swimming around that you had no idea existed, and that pretty well describes it.

    Back when I was practicing law two of the biggest issues were whether a bankruptcy was necessary, and if so, when to file a bankruptcy. Even people calling who had obviously done some research on bankruptcy had little/no idea on either of those issues.

    Anyway, buying or selling a house is somewhat as complicated, and also an area where experience is key. Yes you can do either yourself, but that doesn’t mean you’ll do them to the best result.

    Oh, finally, it’s also an area where you need to be somewhat careful about who you select to help you. In the bankruptcy area there are attorneys that just file anyone at anytime, in order to bring in the fees as soon as possible. I’m sure there are agents that do similar things, like not pointing clients away from potentially problematic properties.

  61. 61
    Kary L. Krismer says:

    RE: grumble @ 60 – 20 years of doing bankruptcy was enough, and I didn’t want to switch to another area of the law.

    Oh, also my wife was an agent, and with the crazy real estate hours I either had to join her or divorce her. ;-)

  62. 62
    VermillionSky says:

    By Greg Perry @ 18:

    I know of several examples of inacurate blogging that hurt Seller’s interest. For instance, agent put in her comments, “not a fixer”. The blogging company had their filters set for “fixers”, and actually blogged the listing as a fixer. One listing agent found this out as they had visitor come in off the street wondering why the lisitng was misrepresented in the blog as a fixer. Further research found several examples of this. The property was grossly misrepresented by the blogging company.

    By Greg Perry @ 21:

    By The Tim @ 19:

    RE: Greg Perry @ 18 – What the heck is a “blogging company” and how is it used by real estate salespeople?

    The “blogging” company in the above example was Redfin. The “not a fixer” properties were being represented as “fixers”.

    By calling Redfin a “blogging company” you imply that Redfin’s primary business is blogging, and that the egregious mislabeling of the property occurred in a blog entry on that website. As far as I am aware, Redfin’s primary business is not blogging, but rather is real estate sales. One could argue that they are better known for their superior real estate search engine tools than for real estate sales, but that still wouldn’t make them a “blogging company” any more than Google. From your description of the problem, it seems to be a bug in their property search feature, not a mistaken blog entry; any real estate agency website with property search could have the same problem. At any rate, I don’t see how the new law on blogging would pertain to the output of a search engine.

    Furthermore, Redfin also posts the full description when it links to the listing from their search engine, so whomever searched for fixers and found that listing should have easily seen in the description (and probably the pictures) that it was “not a fixer.” I’ve occasionally seen mistakes in the data listed there (e.g., prior sales data that doesn’t match the county records), but that is easily cleared up by cross-checking with other data (either within the same listing or from outside sources).

    And finally, whoever marketed their product as “not a fixer” probably would be better served by describing it in a different way (i.e., using positive words, rather than negative words). It may be possible for somebody to see “not a fixer” and focus only on the word “fixer.” This would have the opposite effect on their target market. Probably something like “pristine condition,” or “excellent condition,” or “move-in ready” would be a better description. I’m not a marketing person, though, so maybe the best marketing strategy is also the counter-intuitive one. Agents should be aware of how their listings will play in search engines.. at the very least how they will play in the popular ones like Redfin’s.

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