A Real Estate Discussion Blog

I am writing this post completely from the perspective of a consumer who has a rental property and is looking to hire a property manager in Hudson, FL.  The last few I have dealt with really left a bad taste in my mouth.  I sincerely hope a GOOD Property Manager reads this and tells me I have it all wrong.  I would love to have more faith in an industry that I love. 

So here goes--

One of my biggest bones of contention with Property Managers is that they typically charge one month's rent for placing a renter and 10% of the month rent thereafter.  Good if you are charging $400/month rent, but I am asking $1750/month.  This is a lot more than the average rent in the market, however I have always found a renter in 3 weeks-3 months simply by using Craigslist. 

I ask PMs why they charge this large finder's fee when interviewing them and they say to cover their advertising costs.  Ok, I get that.  But my question then is what EXTRA ways are you going to market my $1750/month place verses the $400/month place you also have on the market.  NOT ONE PM has ever given me a good answer to this question, making me feel like I am basically subsidizing all the PM's advertising.  If all properties are marketed the same way, shouldn't all finder's fees be the same? 

Then the second question I ask PM is- If marketing is such a big expense upfront for you, what if I do some of my own marketing as the homeowner, field all the calls, and then if anyone is interested in seeing the place I will refer them to you.  Of course I would expect some discount having been the one who actually found the renter.  At that point, the only thing the PM can do that I can't is physically show the property.  Shouldn't I get a reward for doing the hard part (which is how this task is described to me in the interview process)?  No PM I have ever interviewed has been willing to offer me one. 

Then you move on to the monthly 10% charge.  Most of the same questions apply here too.  What extra work are you doing with my tenants where you are getting $175/month verses the ones where you are recieving $40/month. 

The whole system seems broke to me.  I think there should be some sort of a la carte system.  Or maybe it should work more like an attourney where you bill by the hour, so you are actually getting paid for the effort you put into serving your client.  As it stands now, I feel like I am being punished for having a home that rents at higher-than-market averages. 

As I said above, I hope a Property Manager will read this and educate me on why they charge what they do (but no one that I have talked to has been able to convince me otherwise yet).

The California Association Of Realtors recently released their 2007 Home Buyer survey.  The survey is based on Buyers during the second half of 2006.  Overall this report has a wealth of information and many, many AR posts could be written about the various pieces of information this report delivers.  Any agent working to put together a media strategy should read this report to help them make strategic marketing decisions. 

Today I wanted to touch on one interesting piece of information that jumped out at me regarding where Realtors are spending their ad dollars. 

The report found that 72% of Buyers used the Internet as an important part of their home buying and selection process.  This compares with 2.5% that said they looked at a real estate magazine during their search, 4% who said they used a newspaper ads, and 7.6% that said they viewed newspaper Open Houses. 

Borrell Associateshas said that approximately $5 billion dollars will be spent this year on advertising in the real estate category.  They also estimate that of this amount, approximately 14% of these advertising dollars is spent on online advertising. 

There is huge gap between where consumers are going to find real estate information and where Realtors are actually spending ad dollars. 

I know that many Internet sites allow you to advertise your listings for free, so the gap in the amount of exposure online may not be as big as the advertising dollars show, but nonetheless, the gap is very big. 

Knowing this, it seems the current trend in shifting ad dollars online is inevitable, but it surprises me how slow this shift is occurring. 

The CAR report goes on to examine where these consumers are spending a bulk of their time online.  Again, good information to know when building a media strategy. 

- 35% of Buyers visited Google first when starting their search for a home. This means Realtors that show up in Google search results have a big advantage.

- When asked "what was the most useful website visited during the home buying process?" Buyers said:
       - Individual Realtor web site (31%)
       - Realtor.com (20%)
       - Real Estate Brokerage/Company site (12%)
       - Zillow.com (12%)
       - Yahoo Real Estate (5%)

Hopefully knowing this information will help you put together an efficient marketing strategy moving forward. 

Today Inman News announced their 2007 Inman Innovator Award finalists. 

They always have an interesting spread of candidates in each category.  Some of them make you wonder- what is a traditional company like Coldwell Banker doing in a Innovative Broker category mixed in alongside one of the newest industry disrupters like Iggy's House. 

Of course it is worth noting that our own Active Rain made the "most innovative media site" list.  While I agree that Active Rain should be nominated for something, as it is a fantastic community site, I am curious as to what makes it a media site?  All the other candidates in this category are primarily advertising supported.  The audience aspect maybe?  I would have fit it under the Blog category, as it is really one big, multi-author blogging site. 

Overall, interesting to see this list.  And further, it is interesting to the categories on the list.  Who would have thought blogging would have been a catagory only a few years ago?

Good luck to all on this list and I will see you in San Francisco shortly! 

Most Innovative Brokerage or Franchise    

Coldwell Banker
John L. Scott Real Estate
Real Living
Foxtons
The Corcoran Group
Iggys House
@Properties
UrbanDigs

Most Innovative Web Service

Point2 Technologies' National Listing Service
Trulia Voices
Zillow Q&A
vFlyer
Wellcomemat
Cyberhomes
HUD's Neighborhood Networks
FTC's Competition in Real Estate Web resource
HAR.com (Houston Association of Realtors)

Most Innovative Technology

Google Street View
Meebo
Jott
MyBlogLog
Talkshoe
Altos Research's Market Widget
Xpressdocs
RealTech

Most Innovative Blog

Transparent Real Estate
Patrick.net
Mortgage Fraud Blog
Bloodhound Blog
Calculated Risk
Redfin's Sweet Digs blogs
3 Oceans Real Estate
Real Estate Competition and the Law
Real Estate Tomato

Most Innovative Media Site

Active Rain Real Estate Network
Business Week's Hot Properties
New York Times' Real Estate Site
Wall St. Journal's RealEstateJournal.com
Curbed.com's real estate network
"60 Minutes" Multimedia Article/Segment Site

I just wanted to publically post a THANK YOU to Active Rain for making the 1 Year AR Birthday Party in Chicago happen.  It was so nice to get together with community members and also meet Matt and Lydia. 

I won't waste my time writing about the event since there are others (with a lot more points than me) that have already beat me to the punch, so I will simply link to them if you want to read more and see pictures from the event. 

Lucky Lang - http://activerain.com/blogsview/125828/Active-Rain-Birthday-Party

Lola Audu - http://activerain.com/blogsview/125405/Recipie-for-an-Active

Craig Schiller - http://activerain.com/blogsview/126028/-How-Does-Active

Thank you again!  And Happy Birthday. 

(I stole this picture from Lucky Lang's post - sorry Lucky!)  :) 

This video was developed by one of our programmers at Zillow, It spoofs Apple's advertising campaign, the one with the white background with the geeky PC guy and the laid-back, cool MAC guy.  He is the PC guy in the video.  It is absolutely hilarious, especially if you care about the PC verses MAC debate. 

http://www.youtube.com/watch?v=Jkrn6ecxthM

(image courtesy of apple.com)

Right now on Zillow if you want to advertise your listings for free on the site, you can simply upload each one.  It isn't a hard process, but we at Zillow are working to make the process even easier for you.  We are currently working on developing a system where you can simply feed to us.  The below entry was posted on the Zillow blog this week.  If you are interested, please be sure to fill out this form so that we can ping you when this service is available. 

(appeared on Zillow Blog this week) 

Broker Feeds - Coming Soon

Posted by Jeff Somers, Director, Agent Services 

Soon, we will be launching the capability for brokers to automatically upload their active listings for free to Zillow, reaching the more than 4 million people who come to the site every month -- more than half of whom are in the market to buy or sell. 

Even when we first launched the ability for listing agents and brokers to add their listings for free to Zillow last December, we knew we wanted to find ways to make the process even easier. We have talked with numerous agents and brokers around the country -- and we have heard over and over that you want to send us listings through a direct broker feed. As I type, our developers are wrapping up work on a very simple tool that will allow brokers to automatically upload listings to the site and keep those listings up to date.

If you'd like to be one of the first to know when you can send us your feed, please follow this link & fill out the form. Just like today, any and all contacts agents or brokers receive from listings -- be it email, phone calls, or clicks to their website -- are free.

I was recently thinking about how professionals, other than agents, could utilize the Zillow website.  I got particularly thinking about home stagers.  There are the two obvious ways to participate on the site: 1) write articles and post them to the real estate guide about staging and 2) to buy advertising on the site (click here if you are interested in finding out more about that option).

But are there other creative ways to leverage the 4+ million audience?  When I think about home staging, I think about before and after photos.  Everyone loves to see photos of home stagers handiwork.  A few months ago Zillow launched a lot of new technology, and one of the new releases was the ability for anyone to upload any photos to a home.  I was thinking, stagers have a lot of photos.  But how would a stager get branding by providing photos?  What if the uploaded image was watermarked across the bottom with a tag line like "home staged by http://www.homestagerx.com/".   

I don't have any good examples of this application to post on this entry because it was just a thought I had.  Would the client care that you uploaded photos, maybe they would see this as an extra service?  I would love to hear if home stagers out there think this idea has any legs.

(This is a lame photo, but illustrates what I am talking about)

You could either buy every single home in the small town of Clear Lake, IA, where I grew up.  Or you could buy director James Cameron's ranchland that went on the market this week, Tranquility Base. 

The area for sale is made up of 7 separate parcels totaling ±729 acres along the Malibu coastline and Santa Monica Bay.  Property photos can be viewed here.

What would the monthly payment be on something like that?  Only the GDP of a small country.  Let's say the buyer puts 20% down and finances the rest at 6.25% for 30 years.  Your monthly payment would be $122,897.15

If you are the Realtor lucky enough to have this listing, and for fun, say you charged a typical commission rate of 2.5%.  That would mean a commission check of $623,750.

Maybe you really like the neighborhood, but don't think you can quite swing the $100K monthly mortgage.  Then look no further than across the street to Britney Spear's 9,130-square-foot houselisted for $11,999,999.  This is recently lowered from the original $13,000,000 and has been on the market since January, so she may even cut you a deal.  If we use the same assumptions, buying this home would cut your mortgage in half to a cool $59,108.85 each month.