Sneak preview: Real Estate Cafe video

As featured in the Wall Street Journal, The Real Estate Cafe offers a 100% commission rebate for "do-it-yourself" home buyers. 

To celebrate the pre-release of our new video, we're offering a limited number of special discounts this weekend.  See our annual "Fare Sale" blog post from 2008, If airlines have fare sales, should real estate agents? for details, or call 617-661-4046 to SaveASAP!

Visit the links above to read our Mission Statement and Menu of fees & rebates, and follow our latest updates on http://twitter.com/RealEstateCafe.

Off-market listings outpace sales, represent opportunity to triple tax credit?

The housing market is entering the traditional "off-season" in New England, and as in past years, The Real Estate Cafe is monitoring expired, canceled, and withdrawn listings across Massachusetts. Over the past six and a half weeks, there have been approximately 10,700 expired, canceled and withdrawn listings across all price ranges and all residential property types (single family, condos, multi-family, and land.)

Surprisingly, 12% more listings have come OFF the market than have SOLD during the same period, a difference of 1,150 listings, DESPITE home buyer tax credits.  Could timing the housing market deliver savings three times the tax credit?  Let's explore that question (we invite your feedback): 

If the median asking price of expired and canceled listings is more than $300,000, prudent home buyers who did not get sucked into self-defeating "bidding wars" before the original $8,000 tax credit was extended, could potentially TRIPLE their savings if sellers discount their price by the amount of the brokerage fee they are no longer obligated to pay. (Here's what the math looks like: Deduct $15,000 to $18,000 from the $300,000 asking price ADD $8,000 tax credit = Total homebuyer savings of $23,000 to $26,000 or triple the $8,000 tax credit alone, right?)

Overall, how large a savings opportunity does timing the market represent?  Consider the following:  Approximately ten listings have expired, canceled, or been withdrawn from the MLS statewide EVERY HOUR over the past 45 days, or one listing off market every six minutes.

The 45 day total of 10,700 listings is three times more than the 10 day period surrounding the 4th of July, another traditional period when listing contracts expire. As documented in an earlier blog post, the RECafe forecasted 3,500 expired and canceled listings, or more than one every four minutes across MA!  As fee-for-service buyer agents, we don't take listings.  So we're glad to help you save money by identifying homes BEFORE they are listed on the MLS, or (2) AFTER they expire or are canceled.  Ready to take action?  (1) Preview our video, (2) Sign-up for daily email updates, and (3) Call 617-661-4046 to learn about our unique "proactive house hunting" strategies. 

Is Real Estate ripe for VRM?

Email written to Doc Searls, coauthor of ClueTrain Manifesto, originally posted a month ago as comment on ProjectVRM blog,

Doc, Thanks for launching real estate as a session topic at VRoom Boston 2009. I’d like to use this comment to get some ideas started in response to your question, sent to me privately, about consumer-centric real estate business models.

Based on my limited understanding of fourth party vs user-driven services, my response is that the “ideal real estate business, at least for buyers,” is not a business but a network of “fourth party” organizations, or home buyer clubs both public / non-profit and private / for profit. Think of an AARP or AAA model but with LOCAL home buyer clubs that aggregate “user-driven” services and savings opportunities by local housing market, from both local and national vendors.

After the meltdown of the housing market, mortgage requirements have tightened and home buyers once again have to save real money, up to 20% down for their first home or condo. That has contributed to the slowdown in the housing market. Home buyer clubs could expedite that time frame by reducing transaction costs and delivering savings from four or five segments of the marketplace:
1. Lenders,
2. Developers / sellers,
3. Brokers, and
4. Product and service vendors.
5. Optional: Government subsidies and incentives, local and national

Trends at a recent real estate technology conference in San Francisco lead me to believe that home buyer clubs and an MLS of buyers could emerge as new players in the housing marketplace. Some of us have talked about those ideas for years, drafted business plans, even experimented with local organizations, like the Mass. Homebuyers Club (1990-1995).

If you google “home buyers club,” you will see that there are already a variety of initiatives across the country. My goal would be to create a digital tool chest so that local organizations, public and private, can assemble their own home buyer clubs to enable real estate consumers to save billions of dollars annually. (In 1998, McKinsey & Co. first estimated that home buyers and sellers could save $30 billion annually by harnessing the money-saving power of the internet.)

Where should we start? Can we inventory best of breed new consumer centric businesses and VRM tools, and update this old business plan to co-author a real estate and VRM manifesto (or something else)?

HomeSearchID: Executive Summary Working draft, originally written 2000-2002

Two major paradigm shifts predicted in the original business plan are emerging and could become cornerstones for an "app store" of new VRM tools for consumers:

1.  Sellers will be able to identify and contact potential buyers as easily as buyers currently find listings, and

2.  Housing searches will access ANY existing or permitted dwelling unit, approximately 100 million properties, rather than “active” listings--about 1.3 million at any time.

The proposed business venture, HomeSearchID will give buyers and sellers an opportunity to interact directly in this new environment without real estate agents thereby minimizing fees and maximizing consumer savings. 

UPDATE FROM NAR CONVENTION:  Sunday, November 15, 2009

While "do-it-yourself" homebuyers and sellers may cheer at the pull quote above, most real estate agents will be threatened.  However as the past decade has proven, real estate agents won't disappear but their role will change as they continue to evolve from sales people to consultants.  As proposed a month ago, I am visiting hundreds of exhibitors at the NAR convention identifying businesses which already have VRM-like characteristics.  Special thanks to Tara Hunt, one of the featured speakers, for cohosting the TweetUp last night to expand the conversation about VRM and real estate.  You can follow the ongoing discussion by searching for #VRM and #REVRM on Twitter.  To be added to the REVRM TwitList, send your Twitter address to http://Twitter.com/RealEstateCafe.  Watch for video (NOW LIVE ON YOUTUBE!), slides, and Google Wave soon!

Comeback of the Consumer Savings Value Proposition in Real Estate

Like fellow real estate consumer advocates and "change agents," my passion is helping real estate consumers save money—collectively, an estimated $30 billion annually through new technologies and new money-saving business models.  Over the past fifteen years, I've come to believe that a steady drumbeat of innovation is more likely to be transforming than a single “big bang” event that seeks to bring about "revolutionary" changes the real estate industry.

So, I was delighted to see the “Comeback of the Consumer Savings Value Proposition” at ConnectSF 2009, the leading real estate technology conference in August. There wasn't a panel by that name on the formal agenda, but the comeback was there in the “Start-up Alley,” “Launch Pad,” and “Connect Create.” Beyond FSBOs and alternative fees, I counted a half dozen ways new companies are helping real estate consumers save money:

1. SAVINGS AGGREGATORS
Examples:
http://www.CondoDealz.com
http://www.Closing.com
http://www.WorkforceResource.com

2. SOCIAL SAVINGS: A bold new frontier, consumers rewarded by sharing savings
Example:
http://www.MyFrontSteps.com

3. PARADIGM CHANGERS
Example:
http://www.NationalBLS.com (National Buyer Listing Service, need we say more?)

4. INFORMED DECISION-MAKING TOOLS
Examples:
http://www.AltosResearch.com
http://NeighborCity.com

5. FEE REDUCTIONS / SERVICE COMPANIES
Example:
http://www.Home-Account.com

6. FEE TRANSPARENCY
Examples:
http://www.Closing.com
Agent Scouting Report (if they ever publish commissions, could deliver billions in consumer savings!)

Whether those new entrants ever think of themselves as a group, “change agents” are transforming the industry, some though technology, others through the political process (go Bruce Hahn), others through new consumer groups (go Doug Miller), and still others by educating consumers directly about their rights (go Erle Rawlins).

I continue to believe we are more a loose affiliation of real estate consumer advocates with the ability to organize on an adhoc basis (see case study from 2001), than a single organization or an event waiting to happen. Whether we ever sing together as one chorus, individuals like Joel Stern have proven the power of one consistent, prophetic voice.

Would anyone else, regardless of whether they are passionate about a single issue or systemic change, be interested using a wiki to coauthor a reform agenda and / or catalogue consumer savings opportunities in real estate?  How about attending a monthly series of real estate round tables, or fireside chats, in Boston and online?  Here's an example of one hosted at the Berkman Center for Internet & Society at Harvard Law School in January 2009.  I am there again today, talking about using VRM (vendor relationship management) to deliver consumer savings through a national network of self-organizing local home buyer clubs.  You can follow VRoom Boston 2009 on Twitter using #VRM.

Should we organize a "FSBOTradeMart" so sellers can meet vendors & homebuyers?

Homeowners:  If you're already selling your home "for sale by owner" or hope to do some sometime this Fall, would it be helpful to meet (1) other sellers, (2) "best of breed" money-saving vendors who can turbocharge your FSBO, and (3) potential homebuyers?

See comments on our blog post earlier this year, "Should we organize a "FSBO Camp," a real estate unconference for homebuyers & sellers?" and follow Twitter.com/RealEstateCafe for updates and brainstorming TweetUps.

If you'd like to help plan the event, demonstrate your produce or service, or simply drop in, please email realestatecafe (at) gmail.com or call us:  617-661-4046.