In my aforementioned sales meeting, one of the agents said he’s struggling to compete against brokers and agents offering very, very small commission rates to prospective sellers. It was his feeling, and that of several others in the room, that in a slow real estate market such as ours such models provide even more competition than normal.

Of course, this seemed completely counter-intuitive to me. In slow market conditions, it costs far more to properly market and sell a home than in a fast-moving market. And if brokerages and agents are struggling to stay afloat based on a higher commission rate, how can a company operating on razor-thin margins expect to survive?

Proof came yesterday in the form of news on Foxton’s, a London-based discount real estate brokerage operating primarily in New Jersey, which will be laying off 350 of its remaining 380 employees and likely filing for bankruptcy.

Said John D. Blomquist, Foxton’s senior vice president and general counsel, …

“Foxtons is well run, very efficient, has a great team and has pioneered a new model in the real estate business – a model which has proven itself and, we believe, will have lasting influence on our sector.”

I hate to break it to you John but no, the model hasn’t proven itself and no, it will not have a lasting influence on your sector. If the answers had been affirmative, you would still be in business.

Blomquist said Foxtons has “been battling against a real estate market that recently has turned into a sharp decline, and the company no longer has the liquidity to operate as a going concern.”

We’re all battling a real estate market that turned into a sharp decline. But many of us are still here, still working, still selling real estate. Blomquist’s comments sound like all of the excuses that came out of Tuesday’s meeting. Or even the USFL once it was shut down by the NFL two decades ago ago. (Remember the New Jersey Generals, John?)

Apparently the big mistake Foxton’s made was not securing enough venture capital to stay afloat. Of course, even that money eventually runs out. Think some folks up in the Seattle area are taking note?

ADDITIONAL READING:

• Asbury Park Press - Real-Estate Downturn Downfall at Foxton’s
• New Jersey Real Estate Report - If Dead Weight Leaves the Business it Makes Me Very Happy
• 360 Digest - What a Surprise
• Plainfield Today - Real Estate Bomb. Foxtons Folds

Technorati Tags: real estate marketing, real estate technology, Foxton’s, Redfin

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Tags: General Real Estate, Marketing, Tips for Sellers, Tips for Buyers, Technology by Jonathan Dalton
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The time has come. After much deliberation, I’ve come to realize that I’ve spent too much time selling real estate and not enough time working on a full-fledged acquisition strategy. I want to be bought out. That, my friends, is the dominant theme of Real Estate 2.0.

It’s not about transparency. It’s not about the consumer. It’s not even about the agents for many of the third-party interlopers. It’s all about the benjamins.

Case in point: Active Rain, an online real estate community that provides free blogs to its members, has sued Move.Com because Move.Com’s folks allegedly promised to buy out Active Rain’s folks but then changed their mind.

Active Rain once was a kinder, gentler version of the RealTalk listserv - a great deal of information for real estate agents without the risk of being flamed into cinders. But then word got out. And people started looking at how you could accumulate points and get an SEO bonus to boot. And so they started writing posts for the points rather than because they had something to say. And as of this moment, at least 90% of the blogs on Active Rain suck because the writers never learned there’s a larger point than getting points.

Move.Com is in much the same place, only with fewer blogs and a higher degree of sucking among the authors. Again, almost none of the authors have any idea why they have a blog but the price was right and REALTOR magazine told them that they needed one and so they started writing.

In some ways, this would have been a marriage made in hell - a powerful website from an SEO perspective being purchased by a company with no clue what real estate blogs really are about … consumer education, hopefully without the dizzying spin so prevalent in all things touched by NAR.

The details soon will disappear behind Inman news’ subscription wall. If you care about the he said, she said then go to Athol’s blog where he’s got links to the whole fiasco.

As for what really has my goat about the whole thing, it’s the utter lack of transparency in the entire process. Real estate agents are beaten about the head and shoulders for the mere to desire to make a buck yet that’s all that the majority of the real estate 2.0 folks are looking to do. And they’re doing it with our “product” - whether it’s our inventory, our writings, our photographs.

How far would Trulia Voices go without agents answering questions (even agents who have never visited the state about which they’re answering?) What about the listing feeds? Would Redfin have anywhere near the cache if we didn’t waste our time talking about it?

Active Rain wouldn’t exist if not for the writers. Localism, AR’s stepchild, never would have gotten off the ground if agents hadn’t leaped like lemmings to post their photographs and intellectual property for a few points. MyHouseKey didn’t get the contributions and fell through.

We provide the content. The designer wonks get all the cash.

Screw it … send me the check and the website’s yours. Hell, I’ll even through throw in Captain Morgan and a half-eaten Sparky from ASU for an extra $25.

It doesn’t get much more transparent than that, does it?

UPDATE: Here’s the thread on AR. I understand some measure of support but it doesn’t seem like most of the folks there get what’s happening.

Joel Burslem at Future of Real Estate Marketing does get it - the content you add to these sites isn’t your own.

Kevin Boer also weighs in at 3 Oceans. As does Brian Brady. And, of course, Odysseus. (And I finally beat Greg to a post on something. Maybe the man does sleep after all.)

UPDATE TWO: Grammar corrected. Oy vey. Thanks to Brian for the comment which made me aware of my rant-induced error. And I also fixed the link to the AR thread.

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Remember the post a couple of weeks ago when I talked about how you could sell your Phoenix real estate in a mere two weeks by pricing your property well below market value?

The folks at Political Calculations were reading along and created a calculator that will run the numbers for you based on my theory. If Zillow purports to provide a current value for the home, then this would be the equivalent for determining selling value - a decent place to start, but far from the definitive answer.

Real estate, after all, is local. In fact it’s often hyper-local. And as I’ve said many times, what applies to a home in Buckeye or Maricopa doesn’t necessarily apply to a similar home in Scottsdale or Glendale. That’s where incorporating the expertise of someone who knows the market and knows the area comes into play.

(At least I’d never hear a seller say, “but Political Calculations says I should be listing my home for $30,000 than you’re telling me.”)

Having said that, if this calculator blows up and the folks from Political Calculations end up with a few million in venture capital, I’d appreciate a small check as the original author.  A couple of hundred thousand would probably suffice.

Technorati Tags: Phoenix real estate, real estate pricing

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I just received the following press release from the folks at KB Homes …

KB Home, one of the nation’s largest homebuilders, and Disney Consumer Products announced today a unique collaboration to offer Disney Home product options to KB Home homebuyers. Disney Home products will be offered at KB Home Studios, the retail-like design centers in which KB Home homebuyers select options to personalize their new homes, beginning in 2008.

I’m thinking some of the more popular features will be Mickey’s Magical Interior Door Locks and Grumpy’s Finished Garage of fun.

One of the consistent challenges I’ve found in selling KB Homes for resale is the generally unfinished nature of the property because many things most buyers want - a finished garage, interior door locks, linoleum (if not tile) in the bathrooms - is an upgrade.

How adding the mouse ears will help on the score, I’m not certain.

On the flip side, KB provides some of the most affordable homes in the market so there always will be a buyer pool, assuming they survive the trip to the design center.

Technorati Tags: Phoenix real estate, KB Homes

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When I was at Dobson High School in Mesa we lost classmates to automobile accidents. But to a late-night shooting? Unthinkable.

Times change. Not always for the better. Regardless, somewhere there’s a killer still on the loose, armed now with the knowledge that he took the life of a high school sophomore.

Details of what happened early Sunday morning are sketchy but almost unimportant. This was a kid. And now he’s gone.

This makeshift memorial was placed along the school’s fence yesterday.

Donations may be made to Raegan’s family through Bank of America. Donations also can be made to The New Foundation, P.O. Box 3828, Scottsdale, AZ 85271-3828.

Services are slated for Friday morning at 11 a.m. at Chandler Christian Church, 1825 S. Alma School Road.

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Tags: Miscellany by Jonathan Dalton
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