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just checked out the article on transparency on the last issue of Wired, which sort of confirmed what I have always felt. They truth will come out anyway so be proactive.

The piece mentioned redfin , the preverbal thorn in the real estate industry’s paw, and how Glenn Kelman had “successfully” fended off the rest of the industry to breath life into his company. I’m not convinced that Redfin can make it back but I am a fan of how Kelman took his fight out in the open.  If you going to get taken out… go out fighting. I don’t think the industry can hide its dirty laundry anymore and its a mistake to try to.

Google is more than just the “phone book on steroids” its a reputation engine and if you make a misstep, there are 1000s of bloggers to let you know where you went wrong… and guess what… they are going to be at the top of google’s search results.

The article also had a good piece on how Jobster CEO Jason Goldberg made some misleading statements on his blog prior to laying off 40% of his workforce. POWWWW… The bloggers fired back and you can fill in the rest of the story. I have a little experience in both of these industries… and both need to have more transparency.

If you have any doubts… take a look at Yelp.com I can’t find a sub 30 year old that hasn’t used or review something on Yelp. Its the tool of the future and the generation thats going to take the reigns from the baby boomers.

The Bears just man-handled the New Orleans Saints and as I write this it looks as if the will be a replay of that epic battle (bears vs. patriots, UPDATE: PATS LOSE!) that took place 21 years ago for the NFL championship. Only this time one of the greatest players that ever walked on the field will not be there to see it. #34 Waltor Payton

What does this have to do with the real estate business? When I was a kid growing up in Chicago and sitting on the freezing cold concrete seats of Solider Field, the Bears were typically losing, but Walter was always in top form. He played every down like it was the last he would ever play, if a defender was going to tackle Payton, they paid a huge price in pain and effort. Coaches, players and fans of opposing teams knew that this one man with his extraordinary dedication to excellence could and would put an “L” on your record for the season. Sometimes we as service providers forget that we need to play every down like its our last, and give a measure of devotion to our trade and our clients that can and will turn a potential bad situation to a positive outcome.

Whatever your inspiration, great customer service is just something we have to get up everyday and do. Its what separates the good from the great.

Walter wasn’t the biggest, strongest, or most talented running back, he was just the most dedicated, it made him, in the words of Mike Ditka “The Greatest Football Player, PERIOD!” What are you dedicated to?

So I’m walking thru the mall parking lot… or maybe it was the sushi bar parking lot… it was dark and I was drinking, so I not to sure where the one ended and the other started… That’s when I see this really attractive Ms. gets out of a black car. Silky blonde hair, tall, long legs, flowing dress, dark eyes, amazing! So my car is in that direction and I walk by her, she smiles and winks at me! winks~ like in a old 40’s movie… I’m like “hey she’s pretty classy…” having a very beautiful ms. at home, I keep walking to my car, as I pass the car she hopped out of I catch this license plate on the back of the car! I wonder if deals with the devil get you a NAR membership card?

WOW there is this bizarre chicken and egg type conversation going on over at Bloodhound Blog

i’d like to offer some food for thought… consider the sale of a stock. The stock price is set by the market, what a seller is willing to sell for and what a buyer is willing to pay. The “broker” charges a commission over an beyond the underlying value of the security, to both sides, for the allowing the participants to use his access to the trading platform (NYSE, NASDAQ, Etc..) . Because there is a lot of liquidity in the market and the stocks as an asset class are uniform, the process of transfering ownership is standardized. The value of the broker here is access, of course they could provide some sort of guidance as to which stocks to buy but you’ll pay a premium for that.

with a home sale transaction, its more ambiguous, but both sides still pay, the market just incorporates the cost of the sale into the market price. If buyer buys a house that has a price of say 400k, that price is probably judged to be reasonable by the buyer (and his bank) based on properties in similar circumstances (comps) many of the properties had commissions paid from their proceeds. So the underlying value of the house doesn’t change as far as the market is concerned because the house is worth 400k even if their is no commission paid.

hmm why is this? its because the housing market is not as liquid as the stock market, price transperency is non-existance, and each asset is unique. You cannot price all homes the same, not even the ones on the same block. The “broker” adds value over and beyond access, they provide marketing and risk mitigation, much like a retailer adds to the value chain of selling vegatables. They provide conveinence and risk mitigation.

If a FSBO will sell his 400k house for 385k to a buyer without an agent, its because they are assuming the risks and the seller is assuming the cost of marketing (pricing included). They are removing elements of the value chain, if you grow your own food, that carrot costs less too…

So before I went to sleep, I was reading some other blogs to get the low down on what’s going on.

I’ve liked Joel Burslem’s blog “Future of Real Estate Marketing” for a while now, and I don’t always agree with his views, but I think he calls it like he sees it..

His recent post, A conversation with Michael Yang, General Manager of Yahoo Real Estate, had an odd factoid in it that I couldn’t shake… it made me get up from my bed and write this post.

“Just in shear numbers alone, Comscore estimates there are 13.2 million people actively looking at real estate online, Michael estimates that combined Yahoo properties touch 89% of them. (that could be through Yahoo!Mail, News, Search etc.)”

I’ve long believed that with the commoditization of real estate listing data with IDX and realtor.com, that lead incubation times have increased several fold. These numbers seem to support that assumption. There are only about 5.5M real estate transactions every year, so what are the other 8 million people doing? They have started their home search 12 or even 18 months out.

So?
Back when I bought my first house there was no realtor.com and if I wanted information about homes in a particular area, I had to have an actual face to face powwow with a real live agent. They were going to get my phone number and maybe even my address. Christ, you didn’t do that unless you were “in the market”. Lead quality was much higher, and the total cost of revenue was a lot lower.

So?
I think this greatly impacts how we approach internet advertising and how we treat internet lead generation. Lead generation sites like House Values sell leads for $50 a pop and you are lucky if 1 in 25 of them converts into real business in the next 6 months. What’s worse is, in buying leads you spent money on “prospects” and a “pipeline” instead of brand building, which has a much better ROI.

Internet advertising is absolutely essential, however some thought should be given to just how to incubate those leads and keep the communication lines open and personal.