We’re Number One!

Is it about Quantity of Sales or Quality of Service?  

 

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A few more thoughts on a recent column….where I suggested it was time to stop giving out silly production awards to Realtors. The ones that flaunt dubious metrics.  And glorify outmoded stereotypes rather than the industry’s highest standards.

In a social media culture where truths are constantly being curated and sold back to people as clickbait, we should declare a moratorium on self-congratulatory ads paid for by Agents and Brokerages.  And accolades proclaiming anyone BEST / MOST / HIGHEST in anything having to do with quantity of sales rather than quality of service. 

An apt analogy might be: Confusing McDonalds for being a great restaurant just because it has surpassed more than a billion burgers sold!  Instead, let’s invent new ways to promote excellence and redefine the transactional relationship between brokerages, agents, buyers and sellers.  If we don’t focus on the actual value(s) we bring to the table, Realtors will eventually fall victim to their own hype at the same time traditional brokerages fall by the digital wayside.

The challenge goes back to the identity problem Realtors have always struggled with.  Are we super-salespeople?  Or are we trusted fiduciaries (dedicated to placing buyers and sellers interests ahead of our own”)?

Are our customers really clients? Or are our clients really customers?  Is this a “trade”? Or is it an actual profession?  Or is it both? Two seemingly incompatible roles married together in a precarious union that requires the Wisdom of Solomon to pull it all off on a daily basis? Depending on who you talk to the answers vary dramatically. And flip-flop back and forth with regularity.

 These days, Buyer-loyalty to their Agents is at an all-time low.  It is common for desperate Buyers to solicit listing agents directly to represent them. Even though it’s hard to imagine anyone would argue that dual-agency is a wise idea. 

Why is it happening? Because Buyers don’t understand the value of Agents,  Or they think they can get a property for less if they cut them out. Or they think all Buyer’s Agents are just trying to make a sale.  So they willingly choose to abdicate their own best interests, by appealing to a listing agent’s greed (because they too, just want to make a sale!). 

This is one of the ways that  “trusted advisor” gets tossed aside by the fear and greed of a heated marketplace.  And just another example of the negative feedback loop that’s been created by our own emphasis on sales. When in doubt, people revert back to the reigning stereotype – it’s all about those sales numbers!

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What did we do before Zillow came along? Remember when people had to rely on Realtors to tell them how much their houses were worth? And weren’t able to download values in a matter of seconds?

I’m sure the techie-types who started Zillow thought they were making the real estate process more transparent when they unveiled their elegant platform to crawl the web and tap into troves of public record information. Best of all, their algorithms were designed to analyze all that big data in a heartbeat and deliver instant gratification to anyone who was interested.

In the first crush of social media in the mid 2000s, people somehow took it on faith that information on the internet was free. And because it was free, it was more accurate because it wasn’t coming from people trying to sell things – like real estate agents trying to sell houses. Thus, the ubiquitous meme of the Zillow Zestimate was born. 

Fifteen years later, the age of innocence for social media Is over. Darker truths are becoming more apparent. We are revising notions about what “free” really means and how easily information can be manipulated into “fake news”. Specially when people accept the false promise of random “facts” at face value and don’t bother spending enough time gathering context.

I’m thinking about a text I got a few weeks ago from a buyer interested in a place I had just put on for $849,000 four days earlier.  It said:  “Your new listing looks great!  Let me know when it gets down to the price that Zillow says it’s worth and I would really be interested in seeing it.”

Really? When I looked up the Zestimate it was $747,000, even though it had just received 7 offers in those first four days and was already in escrow for $900,000!  He didn’t believe me of course, and I confess I didn’t try overly hard to convince him.

So much for Zillow.  And chalk up another bad case of Buyer Disconnect.  Fascinating that people would trust an algorithm more than a person. But that seems to be the state of the world these days. Has anyone seen the recent spate of commercials Facebook is running? Thirty second mea culpas acknowledging the wrong turn they took along the way.

Zillow is a huge corporation that’s publicly traded on NASDAQ.  It was sued not long ago by a disgruntled homeowner who said that a Zestimate had torpedoed his home’s value.  Zillow also just announced that it will start buying and selling homes through a new program called “Instant Offer”.   Somehow, that just doesn’t sound like a good idea to me.

Next:  Why Zillow isn’t accurate.

Turn-Off, Tune-Out and Drop Back-In

 

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“ There are some searches google just can’t help you with.”

  • Recent message in front of a Sunnyvale church

Continuing the conversation…  is it possible that maybe, just maybe we’ve reached an inflection point where enough people have become disenchanted with the cumulative effects tech is having on their lives?

Someday we may all look back and be able to see that the all-encompassing embrace of the digital age started to wane in 2019.  As more people began to resist the temptation to integrate one more device, one more password, one more set of insidiously-engineered algorithms into their daily routines.  Opting instead to turn off, tune out and drop back-in to life in ways that allowed them to be more present.

One of the things tech likes to brag about is the meaningful opportunity social interaction affords everyone on the planet.  Hyper-connectivity, hyper-local, hyper-personal are all part of that hype. Most Realtors struggle with a daily avalanche of solicitations that encourage them to spend huge amounts of time cultivating their online real estate personas. Without a strong digital presence the message goes,  they won’t have the kind of “social proof” that’s necessary to be successful.

Similar to personal Facebook feeds where people’s carefully curated lives often seem too good to be true,  the current generation of real estate hopefuls is busy crafting shiny new avatars that don’t resemble who they are in the real world. Instead of simply venturing out into their own local communities to connect with people on a more experiential level. Not understanding that deeper connection with fewer actual buyers and sellers will make them far more successful than generating lots of shallower “clicks”.

Everyone has heard the meme: “Getting information from the internet is like trying to get a drink of water from a fire hose.”  These days, homebuyers and sellers don’t need more information. They need more context to help them think about all the information they already have. So that the flood of data and details makes more sense when they suddenly find themselves in the heat of the moment.  Specially when the choices they make have such a profound effect on the big life transitions they are going through. The ones that involve the largest assets they’ll ever own.

 

Pushing the Reset Button

 

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Pushing the reset button for 2019.  This is my first attempt at sticking to my New Year’s Resolution:  Reducing the number of words I write, so your aging eyes will have an easier time reading this.  Let’s see how I do…

I was looking back at some of the recurring themes that took up space in these columns over the past year. While trying to gather insight into which topics and trends are most likely to dominate the real estate conversation in the months ahead.

Here are a few likely suspects :

How Low Does it Go? What’s been more impactful than the historic low inventory we’ve experienced? Nothing! Virtually every aspect of the marketplace –  appreciation, record prices, decline in sales, fewer days on market can be traced to the dearth of listings.  There’s no magic bullet on the horizon so it’ll be an ongoing topic of conversation.

Housing and Traffic  Might as well get used to it. This woeful mantra of suburban existence isn’t going away.  Real solutions will require wholesale changes in the way we work and define “quality of life.” Anything less just kicks the can down the road. This isn’t simply part of a big economic cycle. It’s a huge demographic shift that will reverberate well past 2050.

Need for Speed  The breakneck speed of real estate transactions will continue to gain momentum, given the lack of inventory, the heightened competition among buyers and the rabid appetite the technium has for digitizing everything.  Real estate sales represent big dollars,  so techies looking to monetize their efforts will continue seeing the real estate industry as desirable clickbait fodder.

Taxing Questions  Property taxes,  capital gains, second home deductions, mortgage interest limitations (and a host of others) were all on the table this year.  Effects of the new tax law will play out over 2019 and be part of the discussion.  Watch for a State Proposition broadening property tax transfers later this year.

Stuff and Downsizing  Sorry, this one isn’t going away either.  How could I abandon all you procrastinators out there who’ve been talking about Downsizing more than doing something about it? More to come but I’ll end with two essential facts: 1) We’re all getting older. 2) And we can’t take it with us.  It’s not a question of if. It’s a question of when.  See: The Gentle Art of Swedish Death Cleaning for more inspiration.

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There I was driving home on Highway 1 the other night ruminating about the future of real estate, when I came to a grinding halt in traffic. Sitting there unmoving, I glanced up at the Caltrans Board near 41st and noticed a random string of words running across it.  Suddenly my cell rang and I heard an eerie voice on the other end say: “Pay attention and write.”

I was so shocked that I grabbed my laptop and for the next three hours, my meager typing skills tried to keep up with the string of crazy pronouncements channeling across the board. What follows is a small part of what I saw. Predictions for the future? Real estate news courtesy of some Century 23 Agent traveling back in time? Who knows? You be the judge.

~ Realtors will expand efforts to lure GenX homebuyers with cutting edge branding techniques like company tattoos and logo piercings.

~ A large pharmaceutical firm will begin clinical trials of a mourning-after pill designed to relieve symptoms of Buyers Remorse.

~ As more Americans continue to seek smaller homes and simpler lifestyles, a dramatic increase in the number of Near-Life Experiences will be reported.

~ In a variation on the “ice bucket” challenge, Silicon Valley CEOs will take turns living in camper vans outside their headquarters to raise money for affordable housing efforts.

~Busy Techie Buyers will start sending Personal Drones to look at properties rather than driving to see them on their own.

~A new reality tv show will debut next fall called “Extreme Commute: Silicon Valley”. The first episode will feature two computer geeks sitting bumper-to-bumper in a sea of Tesla’s on Hwy 85

~The first-ever Virtual Realty firm will open its doors in China where upscale clients will sit in luxury recliners, don VR goggles and shop for expensive Bay Area Estates they never plan to visit in the flesh.

~A new Facebook scandal will surface when Russian Hackers are caught targeting Bay Area homebuyers with a series of Fake Ads depicting $3 million dollar luxury homes that later prove to be average tract homes.

~The Conversation Pit will make a comeback in American homes. More of them will be located in lead-lined safe rooms, where no electromagnetic tv or phone frequencies can penetrate.

~By spring of 2019, there’ll be a noticeable backlash against technology in real estate. More buyers will refuse to let their agents communicate with them by text.  New “high-touch” real estate firms will open touting “organic and algorithm-free agents”

Live and Work Local

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Today’s question: Why do Sellers occasionally choose out of town Agents to list their homes? It always surprises me when unusual signs pop-up or new listings come on the MLS offered by Agents who don’t live or work here. There are almost 1200 Realtors in Santa Cruz County. You’d think Sellers would have plenty of options right here in their own backyard. I guess I can think of a few reasons why Sellers might hire non-local Agents.  I just can’t think of any good ones.

Here are a few:

  • Sometimes people hire an out of town Agent because he/she is their friend and they don’t want to risk their friendship.
  • Sometimes they know too many local Realtors. They are afraid of offending them all so they pick an out of town Realtor thinking it will go over better.
  • Sometimes they have a sister or aunt who is a Realtor elsewhere that promises to take care of them.
  • Sometimes they look for a Discount Broker who’ll stick their home on the MLS for a nominal fee. They don’t want any other services. So they don’t care whether the Broker lives here.
  • Sometimes they feel compelled to use the same Agent that helped them buy the property ten years ago when they moved here, figuring they worked locally in the past at least once.
  • Sometimes they think Silicon Valley Agents have special access to wealthy Silicon Valley Buyers. (There are always rumors about secret CEO email lists floating around.)
  • Sometimes they think 408 or 605 or 415 agents know how to speak the secret language of tech or money. Sometimes they think they are more sophisticated or experienced because the median price in their zip codes is higher.

Now back to the reality of realty… all real estate is local. Every market has its own unique dynamic. No two are the same. Over the years, quite a few clients have asked me to represent them in the hottest spots around Silicon Valley, but I’ve never agreed to take on any of those lucrative listings.  

Why? Because even under the best of circumstances, I know I can’t generate the same results a qualified and truly local Realtor can. Being a good fiduciary is more important than being a good friend or family member.

Success in the multiple-offer marketplace depends on knowing local agents, local lenders, local ordinances and the lay of the local landscape. You have to know all the nuances and intimate details. That’s something you only get from living in a place for a long time.  

 

THE LITTLE HOARDER IN US ALL

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It’s been awhile since we revisited the subject of  “stuff”. A topic that continues to occupy an inordinate amount of my time as a Realtor. What “stuff” am I talking about? George Carlin stuff. Jam-packed storage unit stuff.  Ubiquitous garage, basement and attic stuff. Stuffed into the back of your closet stuff.

The “stuff” that keeps spawning best-selling books about clutter, the magic of tidying up and zen fantasies about living like a monk.  The “stuff” that has launched an entire cottage industry of packers, organizers and house-whisperers.

The “stuff” that keeps many folks waging endless battles with their own bad habits without really knowing why. The “stuff” that Realtors wrestle with every day when it comes to selling houses. Ask any experienced agent what the biggest hurdle is to getting listings ready?  Hands-down most will say: “Trying to cajole well-meaning homeowners into dealing with their “stuff”.”

For reference: It takes two or three weeks to get an empty house prepped and on the market.  It takes six months or more when a seller has to purge twenty years of stuff to get it ready.  After helping hundreds of overstuffed clients over the years I’ve come to one inescapable conclusion:  Selling a house is hard but finding a home for all the junk in the garage is excruciating.

Near as I can tell, we’re all on the hoarder spectrum. The only difference between those poor souls buried alive by their stuff on Reality TV and the rest of us high-functioning hoarders is a matter of degrees. The rationale for hanging on to things long past their useful shelf-life is always the same no matter whether you’re navigating through mountains of old magazines or just bending around thirty year-old skis to get into the car:  “What if I need it someday”?

It’s a fascinating time in the culture.  A crossroads for aging baby boomers transitioning from the middle third of their lives to the last third. The struggle around “stuff” is lumped into a whole slew of issues euphemistically referred to as downsizing.  Implicit in the term down-size is the notion that a new life in a smaller place means giving up old parts of ourselves we may have trouble letting go of.

Here’s a revised version of the Serenity Prayer for those struggling.  God, grant me the serenity to keep the stuff I do need, the courage to throw out all the stuff I don’t need and the wisdom to know the difference.   If that doesn’t help,  call me. I’m happy to make a house call and give you some guidance.