While having lunch at Bali Hai on San Diego’s Shelter Island, we were able to look across the water and see the USS Midway - now a museum - and also the USS Stennis. As we were getting ready to leave my wife noticed the Stennis was in motion and on its way out.
What does this have to do with Phoenix real estate? Not a damn thing. But it’s pretty cool.
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Last night I finally had the chance to watch last weekend’s World Cup qualifier between the United States and Barbados - a 1-0 victory for the Americans after winning 8-0 in Carson, California the week before.
Barbados’ national side combines a couple of professional players with some semi-pros and several amateurs who took time off from their day jobs as construction workers, electricians and such to represent their country on consecutive weekends. As the announcers said during the match, when watching practice it was easy to differentiate between the professional players and the amateurs even without checking a roster. The level of expertise displayed by the professionals was apparent.
I was reminded of that statement when reading through Trulia Voices this morning:
How do I best buy in Phoenix without using a buyer agent. I have access to the mls & am a veteran home buyer.
Using an agent isn’t necessary. Simply find the property you want, go to an office supply store that carries do-it-yourself paperwork and go for it. Granted, the paperwork isn’t based in Arizona law and doesn’t carry a fraction of the protections of the AAR Purchase Contract, but if you’re committed to doing it yourself, it’s pretty straight forward.
Everything will be fine … unless it’s not, in which case it can go very, very badly. Buying a home in Phoenix isn’t much different than buying a home elsewhere, aside from the fact that Arizona law governs the transaction. If you’ve done it before, you can do it again.
Most veteran home buyers I know wouldn’t need to ask how they could buy a home in the Phoenix real estate market. They’d simply do it. And you could tell just by looking that they were veterans (if not licensed real estate professionals) and not amateurs trying their best to keep up.
In a vague way this cuts back to the debate over who pays the buyers’ agent. As I’ve said many times before, when I am shown concrete evidence that a sales price will be lower because no buyers’ agent is being paid by the seller, I’ll accept the argument that the buyer is paying their agent in the sales price.
But as long as I see sellers pocketing (or expecting to pocket) the commission they had earmarked for a buyers’ agent - proof positive that there was no difference in price solely on the basis of the presence of a buyers’ agent, the argument falls flat.
Technorati Tags: Phoenix real estate, divorced commissions
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Nothing says vacation has ended like coming home from San Diego to temps in the one-teens and a house without a working air conditioner with temps in the high 90s. Fortunately, both beagles were well watered and were fine and after jiggling a switch for a while (and waiting for a few hours as the air conditioner dropped the house temperature 25 degrees) we were fine as well.
So many ideas for posts came into my head during the past week and most disappeared nearly as quickly, receding on the retreating surf. Oh well …
While I was away, though, Inman News ran its series on attracting international buyers. Since I don’t have a subscription to Inman News I never saw the actual article for which I was interviewed (and couldn’t post it anyway) but I seem to sound brilliant in the brief summary on the site:
Part 2, Agents, brokers tap international buyers, features interviews with real estate professionals who market properties and services to foreign buyers. Phoenix-based Realtor Jonathan Dalton has developed a specialty in working with Canadian buyers, and Stan Ponte of Coldwell Banker International Previews describes the magnetism of the Manhattan market to buyers from around the planet.
I’m wishing I had come up with a cool word like magnetism but I think I settled for trying to explain what hooped meant and why I have shoes that remove easily.
What’s struck me as interesting is those on the outside view working with Canadian buyers as some sort of novelty, which really isn’t the case. You’ll need to learn some additional details about the transaction and you’ll need to figure out some of the different terms Canadians have for homes in the Phoenix market, but real estate essentially is real estate wherever you go.
The biggest question is how do you put yourself in front of Canadians looking for real estate here in Phoenix and this blog serves as an answer. I’m likely going to have to find a witty way to expound upon this when I’m speaking on Tapping the Global Real Estate Market at next month’s Inman Connect conference, but it’s about that simple.
Not easy, mind you. But relatively simple.
Speaking of which, I’ve got 12 houses in the wings waiting for a Canadian buyer to take a look in about 90 days … I’ve also got a Chrysler Town & Country which has traveled close to 900 miles with three kids the last few days. Time to do some quick cleaning.
Technorati Tags: Phoenix real estate, Canadian buyers Arizona real estate
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We’ll wrap up this week’s trip down memory lane with my personal favorite from my old blog on RealTown …
The lesson, now as then? You get what you pay for.
This article originally posted on October 18, 2006:
Yesterday there was a fairly spirited debate about the future of real estate commissions, particulary on the side of the buyers’ agents, and whether a flat-rate structure truly represents the future or is little more than the latest marketing fad.
(NOTE: Some of you are probably clicking away from this page, including my wife who may be heading here instead of reading what her husband has to say. Some may view this entire debate as little more than an internecine squabble - agents arguing with each other. Rather than pulling out the rulers and measuring, we’re instead blogging away. If you haven’t quite clicked away, though, it might be worth staying since it is the service you will be receiving and, depending on which side of the transaction you’re on, the dollars you are spending that are being discussed. I also believe your intelligence is being brought into question, but that’s just me.)
I believe it’s safe to assume everyone is familiar with Nordstrom. Fairly pricey clothing, offset by personalized service and an overall service guarantee that can’t be beat: you can return an item for any reason - ANY reason - and the refund promptly is provided with a smile, no questions asked. How can they do this? Because they have the utmost confidence in their value proposition. A Tommy Bahama shirt is the same whether purchased at Nordstrom, Robinsons-May or Macy’s. The difference is in the value of the service provided to the customer.
Nordstrom does not deign to enter the fray with sales on presidential birthdays, national holidays, or random Fridays spread throughout the calendar. The only discount to be found comes twice a year during the semi-annual sale. For some, like my friend Dawna, the semi-annual sale is a national holiday unto itself but that’s another story. How can the store justify only two extensive sales a year? Again, supreme confidence in their value proposition.
For any business, the decision must be made at some point whether the business model will be based on price or on service. Even for those claiming that you can have excellent service at a lower price, public perception ultimately will be their undoing. If it walks like a duck and quacks like a duck, you’re not going to convince someone you’re a swan.
Two restaurants can have essentially the same menu and the same quality food, but if one has soft lighting and linen tablecloths and the other features a couple of wide-screen TVs tuned to ESPN, there’s little doubt the former can charge more based on the ambience and remain as profitable as the latter. Each appeals to the clientele. Diners are not going to the second restaurant for a romantic evening (unless you’re me, as my wife likely will point out). They’re going for the food and the lesser price. End of story.
I believe this will be the crux of the debate regarding the future of real estate commissions - service and value versus price. And it’s not at all a new debate. The only difference between the debate now and the debate then is we have the blogosphere (sorry, Kathie) in which we can hammer each other over the head with our own perspective.
All of the arguments that commissions based on a percentage of the sales price are doomed to extinction completely miss the fact there is a portion of the population - a significant portion of the population, in my view - who happily will pay for service. They want all of the trappings - the soft lighting, the candles, the violin music versus the NFL Game of the Week available in their own living room - and will pay to receive it. It is why AJ’s markets remain in business even though there’s little significant difference in its meat departments versus its parent company, Basha’s, except in the greatly increased price.
When service is your value proposition, service will sell.
Now take the flip side. Let’s take the idea of a capped, flat-rate fee for service for buyers’ agency as has been promoted and argued endlessly of late. Promises have been made that the service will be excellent, and of this we have no doubt. How you measure such an intangle or, more importantly, how the public measures such an intangible remains to be seen but we digress.
Let’s say you advertise that you will cap your commission at $4,000 on a sale of properties $250,000 and under, with whatever remains of the co-broke on a property passed through directly to the buyer. Clearly, you should see an increase in business as those looking for the discount swarm like moths to the flame … until another heat source appears on the horizon offering a cap at $3,900. And then another at $3,800. $3,700. $3,300. $2,500. Where does it end?
Take a look at the stock brokerage industry and the massive discounts offered a few years ago (most continuing today) and tell me, is there ever an end? I argue there is not. Once the journey down the discount path has begun - once the driving force of your business plan is not the service but the price, it’s virtually impossible to pull back from the bring. There always - ALWAYS - will be someone undercutting the rest of the competition. It’s the nature of a free-market system.
But let’s go back to having service as the center of your business model. Service is intangible. It’s touchy-feely. In many cases, it’s nothing more than a feeling, a rush of endorphins akin to eating large quantities of chocolate. Most people can’t define what makes great service better than good service, but they know when they’ve received it.
How do you compete when service is your core? By providing increasingly good service, of course. And is there any question that good service - communication, negotiating skill, contractual knowledge - is of benefit to the consumer at large? Can you honestly say there is nothing noble, nothing worthwhile among those who choose to promote service over price?
Is there any concrete evidence that a seismic shift will take place whereby consumers as a whole eschew service in favor of price, in real estate and other industries? Only in the discount crowd’s rationalizations.
With service as your core message, provide excellent service and price becomes secondary. With price as your core message, all your client base wants to know about is the price and how it compares to everyone else. Service becomes secondary.
You can’t have it both ways because the public won’t buy it. Just ask the progenitors of the McDonalds Happy Meal for Adults.
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We briefly interrupt the regularly scheduled programming for this article in the Saskatoon Star Phoenix - Saskatoon Residents find Arizona Opportunity - in which I was quoted.
Fifteen minutes on the phone as the wife, kids and my mom walk down the beach to Belmont Park and I’m trapped on the patio … all for one quote.
And it wasn’t completely accurate - correct in substance if not in the actual words.
More unfortunate, though, is the almost predictable quote from the CEO of the locally-based Canada Arizona Business Council:
“You can get brand-new houses here for nothing. Nice three-, four-bedroom places for $200,000. There is a real opportunity,” said Glenn Williamson, CEO of the Phoenix-based Canada Arizona Business Council.
Much of my time is spent patiently explaining that this also is true in substance if not in the details. There are nice homes for $200,000 in certain areas of the Valley. But not everywhere. I know Glenn didn’t say that, but that’s the general impression that many Canadian buyers have.
The closer you want to be to the airport, the more expensive the house likely will be. The better view you desire, the more expensive the house will be. Gated community? Raise the price a bit. There are tradeoffs for everything.
It seems the notion that any house on the market can be had for 50 cents on the dollar has faded. There are opportunities to be had here. But giving possibly false impressions about what can be had isn’t particularly helpful.
Enough stalling … I’m off to Legoland.
Technorati Tags: Phoenix real estate, Canadian buyers Arizona real estate
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