We found – 43 articles for New Deal on Real Estate Data

Big Deals, Real Deals and need for New Deal on Real Estate Data

Privacy_NPRivacyDebate_0301016

A leading real estate site recently asked, “Is Donald Trump the Real Deal?”  To fact checkers, the answer is as straightforward as Huffington Post editor note: “Donald Trump is a serial liar…” and accusations that Trump University “lured students to spend up to $35,000 on real estate seminars.”

Even if everyone who’s seen The Big Short agrees with John Oliver’s assessment, “Starting [Trump] mortgage company in 2006 was one of the worst decisions you could possibly make,’ dismissing questions about what’s real in real estate as quickly as some would dump Donald Dumpft would miss some teachable moments.

There are multiple meanings and uses of the word “deal,” and envisioning them in an infographic would be a  complex but interesting exercise.  For example, compromising can be a virtue in “Art of the Deal” (name of the book coauthored by Trump in 2009), but compromising should be constrained by values, notably those people consider a BIG DEAL!

PRIVACY = BIG DEAL

That’s where unfolding headlines about the dispute between the FBI and Apple Computer add important angles to this discussion.  Two weeks ago, a headline in USA Today read:

Here’s why the FBI forcing Apple to break into an iPhone is a big deal

http://bit.ly/PrivacyBigDeal (share via social media)

Apple, The F.B.I. And Your Privacy

http://bit.ly/NPRivacyDebate (share via social media)

Trump has a tarnished track record, and that’s important to expose.  But polls suggest a surprising number of people agree with Apple – exposing their personal data to misuse is a BIG DEAL!   

NEW DEAL ON REAL ESTATE DATA

Contentious panels at recent real estate technology conferences suggest that data ownership is a big deal within the real estate industry.  But what about personal data — confidential data about homebuyers in particular?

MIT professor Sandy Pentland calls for “New Deal on Data” in his article in Harvard Business Review entitled

With Big Data comes Big Responsibility

http://bit.ly/BigDataDeal (share via social media)

Think it’s important to extend that to a “New Deal on Real Estate Data?”  Think blockchain and VRM business models will enable that era?  We do, that’s why we’re encourage homebuyers and homeowners to read this article:

US intelligence chief: we might use the internet of things to spy on you

http://bit.ly/IoTUSpy (share via social media)

If the government admits that IoT can be used to spy on you, does a research lab dedicated to “Powering the Internet of Things for Realtors” raise questions about privacy and data ownership, too?

PRIVACY BY DEFAULT

In December, we were delighted to read that the default setting for Zillow’s recent acquisition, DotLoop, seems to be raising the privacy bar in real estate to favor the consumer.  Their Data Privacy Guarantee reads:

“Dotloop customers own all their data and dotloop will not use the data without customers’ permission.”

Will that give consumers the ability to control the access and use to their personal data? If so, that would be a BIG DEAL because it’s a step towards a new era of user managed access (UMA) in real estate that would reduce confidentiality breaches, set the stage for an agency revival, and ultimately empower consumers to leverage their personal data for financial gain.

CALL TO ACTION:

We’ve written in the past about using personal data in real estate as a use case for a New Deal on Real Estate Data.  In January 2016, we proposed starting blockchain in real estate working groups in Boston and beyond.  Ubitquity.io took the lead to launch a MeetUp in Washington, DC, where Congress is hearings arguments today about privacy versus security concerns.  We’ll extend that debate to include privacy issues and conflicts of interest in real estate via our series of debates on Anchor.fm.  Join us there to help share the future of real estate:

What’s “out of sync” with housing? Can we solve by next #LeapYear: 2020?

http://bit.ly/LeapRE2020 (share via social media)

Or if you’re in Boston, offline to create collages while listening to NPR’s rebroadcast  (see tweet above).

 

Posted in Blockchain, IoT: Internet of Things, Personal data, Privacy, Real Estate Consumer Bill of Rights, Real estate deals, Real Estate Roundtables, RECALL: Real Estate Consumer Alliance, reVRM, Tech Trends | No Comments »

2016: Will Blockchain enable “New Deal on Real Estate Data”?

NewDealOnREData_2016

In what amounts to a New Year’s forecast, Brad Inman, publisher of Inman.com wrote on Facebook:

“This coming year, more disrupters will claim a stake in real estate.”

The question isn’t whether disruption is coming to the real estate industry, it’s what OTHER disruptive changes are coming to housing, demographics, climate and cities over the next decade that will need a new kind of real estate ecosystem (as well as digital + human agents) in the future?

Will other sectors of both the economy and society respond to multiple disruptive changes in general, and embrace new technologies that will enable a “New Deal on Real Estate Data” — wearable devices, driverless cars, SmartCities, SmartHomes & the Internet of Things that connects them?  These are cross-sector challenges / opportunities that need a collaborative effort by multiple stakeholders to maximize their potential benefit.

Shall we start with providing enough affordable housing, so that families and parenthood itself don’t become sustainability issues? There’s not a single county across the U.S. with enough affordable housing!  Or would you prefer to start with the Great Senior Sell-Off?

While some may expect real estate’s “big tent” to contain the evolution of the industry, others — including new players from OUTSIDE the traditional industry — are poised to pioneer new business models, some enabled by blockchain, that could turn the big tent into an “open air marketplace.” Think of a more efficient, consumer-centric alternative to what Brad Inman describes as an “insanely fragmented industry.”

Billions of dollars are at stake, and my hope is that an informal coalition of money-saving innovators will deliver $30B annually in consumer savings by the year 2020, hence the hashtag #RE2020.

Any start-ups / app developers / innovators want to join a Blockchain in Real Estate Cross-Sector Working Group? Collaborative process begins online and offline in Boston in January 2016 ramping up to and beyond the National Association of Realtors annual convention arrives here in November 2018.

Note: As the email above shows, this idea flows from a proposal first submitted to the #Inman25K competition announced informally by Brad Inman on stage at #ICSF15.  Since he’s not selected a winner yet, we’ll start 2016 by seeding a real estate working group within the Boston Blockchain MeetUp without the $25K in prize money. Still, with $3 billion invested in real estate-tech startups over the past three years, we’re working with a large systems change consultant to package a proposal to involve multiple stakeholders.

Inquiries and seed funding welcome via RealEstateCafe@gmail.com.  Happy New Years!

Posted in Affordable housing, Blockchain, Commission Reform, Disrupt Real Estate, IoT: Internet of Things, RE2020, RECALL: Real Estate Consumer Alliance, reVRM, Unconference, VRM | No Comments »

WSJ exposes privacy issues in real estate, need for Consumer Bill of Rights

For homebuyers, sellers and homeowners, National Consumer Protection Week (3/3-9/19) started early.  Today, a headline in the Wall Street Journal exposed yet another wave of Facebook privacy violations — this time revealing that Realtor.com sent Facebook “…the location and price of listings that a user viewed, noting which one were marked as favorites.”

Real Estate Cafe has been writing about the need for real estate consumer bill of rightsinformation fiduciaries, and a new deal on real estate data for years but the urgency has never been front page news until today.

Surveillance Capitalism in Real Estate

My hope as a real estate consumer advocate is that this is where the investigative reporting and regulatory responses begin.  Consumers, including millions of house hunters and every household in the nation, would be surprised — maybe shocked — to learn how real estate apps track their personal data and sell them as leads.  In some cases, apps track online behavior and access financial data to score buyer leads.  In other cases, predictive (some would say predatory) apps track data to identify who is most likely to sell.  Most troubling, other apps boast Stalker 2.0 functionality that can track emails of past clients and flag those that are going through some kind of life transition that might become a business opportunity for their clients.

Real estate apps not only track personal data, in-house dashboards used by mega-brokers allow them to see confidential information on both sides of the transaction so they can sell properties before they are listed on the MLS and collect a double payday. Not just sell properties, but potentially manipulate over-eager buyers in BLIND bidding wars.  See the discussion on need for a bidding war backlash.

Hopefully, these practices underline the urgent need to address real estate and smart home use cases in the scope of national privacy legislation being considered by the US Congress.

Need for Information Fiduciaries 

A diagram of Zillow’s “Living database of all homes,” which includes personal data about homebuyers, sellers, renters, and homeowners, shows the massive scope of their empire and raises questions about consumer privacy.  Their aggressive new push into flipping homes complicates that with questions about conflicts of interest.  Both underline the need for disclosures and privacy protections modeled on the European Union’s GDPR — General Data Protection Regulation.

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Over the past two years, RE2020 — an OPEN collaboration site dedicated to cocreating a new money-saving real estate ecosystem — began threads to protect consumers:

1.  Update of the Homebuyer Bill of Rights, #REBillOfRights, originally drafted in 20 years ago;

2.  Extend agency duties beyond the real estate transaction to the need for Information Fiduciaries.

This exchange between Facebook’s Mark Zuckerberg and Harvard Law professor Jonathan Zittrain underlines the need for information fiduciaries:

What we do know is that Mark Zuckerberg seems confused by his own company’s actions. Asked by Zittrain about his pet idea that Facebook be expected to act as a “information fiduciary” where it is morally and legally responsible to look after people’s data in their own interests, Zuck replied: “The idea of us having a fiduciary relationship with the people who use our services is intuitive.”

But he then argued that the company’s “own self-image of ourselves and what we’re doing is that we’re acting as fiduciaries and trying to build services for people.” Which will be news to anyone that has been following Facebook’s concerted and persistent efforts to hide what information it gathers, and what it does with that information.

Zuckerberg even gave an example of what would be going too far: “If you want to talk in metaphors, messaging is like people’s living room, and we definitely don’t want a society where there’s a camera in everyone’s living room.” To which, of course, Zittrain pointed out that Facebook is literally selling a new device, Portal, that is an internet-connected camera for people’s living rooms. Zuck sort-of recovered by noting that his device uses encryption.

Congressional hearing & local events

In less than a week, the US Senate Committee on Commerce will host a public hearing to “examine what Congress should do to address risks to consumers and implement data privacy protections for all Americans.”  Their press release says “In an age of rapid innovation in technology, consumers need transparency in how their data is collected and used.”  That’s like a sports team only playing defense, but an understandable role for regulators.  On the offensive side of the ball, innovators in the private sector will eventually cocreate a real estate ecosystem that empowers consumers to manage and monetize their personal data to save an estimated $30 billion dollars annually.  That part of our call for a “New Deal on Real Estate Data”, aka #NewDealREData

Eager to connect with fellow consumer / privacy advocates who are open to that vision  and want to set the emerging real estate ecosystem on a Real Estate Consumer Bill of Digital Rights.  If the hearing is broadcast on C-Span, want to host a watch party on Feb 27th in Boston, perhaps at Harvard’s iLab or Smith Center in Harvard Square?

http://bit.ly/DataPrivacyHearing (share via social media)

Just learned of an event at Harvard’s Berkman Center on Feb. 26, 12-2pm entitled, Waking Up to the Internet Platform Disaster.  Let’s use that event to revisit how we can use NCPW to expose real estate as the sleeping giant of the consumer movement.

http://bit.ly/DigitalWakeUP (share via social media)


Footnote:  Thanks to Pat Rioux, former Buyer Agent, Listing Entry-Only pioneer in Massachusetts for catching with the tweet below.  Affectionally known among real estate consumer advocates as Ms. Information, Rioux is now a health data expert, and we hope she continues to keep an eye on privacy issues at the intersection of Health & Housing data.  Hope you can see, this is worse than we thought!

 

Posted in Consumer protection, Defensive Homebuying, Dual Agency Detective, HousingID, IntentCasting, Personal data, Privacy, RE2020, Real Estate Consumer Bill of Rights, RECALL: Real Estate Consumer Alliance, Tech Trends, VRM | No Comments »

Beyond blockchain: Elevating real estate, delivering billions in consumer savings

uLab_Ego2Ecosystem

“What’s Next?” was one of the themes at #ICNY / #ICNY16 and a day after two blockchain gurus wow’ed that audience in NYC, a blockchain-enabled Bidding War platform quietly won an MIT Hackathon!  Here’s the problem statement:

http://bit.ly/BidWarHackIntro

What’s next for blockchain in real estate?  The Realtors have started an impressive lab — @CRTLabs — that’s Powering the Internet of Things for Realtors.  Does that present an opportunity to collaborate or are consumers better served by their own lab?  What role might innovators in Boston play?

http://bit.ly/RE2020Lab

BACKGROUND

Building a multiple offer / bidding war prototype is just one point of entry for dozens of blockchain-enabled use cases in the real estate ecosystem.  RESO — Real Estate Standards Organization — is also exploring blockchain as a solution to their PUID (Property Unique ID) — arguably the digital cornerstone of the MLS.

For unofficial background on this baseline opportunity, visit the wiki from the Future Commerce Hack at MIT in November 2015 to see slides, links, and (dated) discussion of PUID:

http://bit.ly/REBlockScribbles

COLLABORATION

Three opportunities are emerging:

1.  First, if you would like to seed a Blockchain in Real Estate MeetUp in Boston, join one in Washington, DC, or start one in your local community, please let us know.  We’d like to see cross-sector groups of consumer / civic tech / OpenGov advocates, as well as real estate innovators and app developers form nationwide, even internationally.

2.  Second, if you’re a real estate innovator who would like to co-create an open ecosystem in real estate industry capable of delivering billions in consumer savings annually, that’s the goal of #RE2020.  Please follow that hashtag on twitter, and share any time one of your clients (or DIY homebuyer / sellers) saves money!  Our goal is $30 billion annually by the year 2020.

3.  Finally, the National Association of Realtors is bringing their annual convention to Boston during November 2018.  Traditionally, they’ve placed the real estate agent at the center of the transaction, but consumers need a “New Deal on Real Estate Data” that places personal data at the center of the transaction.  Want to participate in a series of activities over the next three years to address this question:

Reform or disrupt? Where will real estate be in 5 years?

What opportunities do you see, and how can we work together?  The headwinds that face the housing industry in the emerging future need cross-sector collaboration. What to contribute to the conversation, online and off, on the road to Boston in 2018?  We need your insights to elevate the conversation!

http://bit.ly/ElevateRE_Tour

Posted in Bidding wars, Blockchain, Consumer protection, Disrupt Real Estate, IoT: Internet of Things, RE2020, Real Estate Consumer Bill of Rights, RECALL: Real Estate Consumer Alliance, Savings & Rebates, VRM | No Comments »

Conflicts of interest beg for Real Estate Consumer Bill of DIGITAL Rights

FiduciaryReformTweet

Seventy-two hours apart, a leading real estate technology news site begins by reminding real estate professionals of their fiduciary duties (Agency = Expertise + UNDIVIDED Loyalty), then another article advises would-be listing agents to farm for sellers with a “Join my buyers waiting list” hook.

Will this “help you get more sellers for that particular neighborhood,” or increase awareness of the heighten threat of conflicts of interest in real estate?

Last week, one of the panels at the Consumer Federation of America’s annual conference was entitled, The Digital Revolution and Personal Information: Consumer Benefits and Concerns.  In fact, one of the panelists, Frank Torres called for a Real Estate Consumer Bill of Rights in Congress nearly 15 years ago when he was with Consumer’s Union.  As you can see from the link below, the call to protect real estate consumers has a long history and a coalition of consumer advocates around the country — still real estate is the sleeping giant of the consumer movement:

http://bit.ly/REBillRights (please share tiny link via social media)

As the release of the Apple’s iWatch brings wearable apps into the mainstream, questions about privacy — who owns data, who can access or share it, and how it can be used with or without my permission — should renew calls for Real Estate Consumer Bill of Rights, DIGITAL rights.

With Big Data Comes Big Responsibility, that’s what MIT’s Sandy Pentland told Harvard Business Review the Harvard Business Review last Fall, and IMHO his call for a “New Deal” on data should be extended to a New Deal on Real Estate data — particularly personal data.

http://bit.ly/BigDataDeal (please share tiny link via social media)

Real estate commissions are so high, it’s not hard to imagine consumers saving billions of dollar annually by leveraging their personal data in the emerging open eco-system in real estate.  If you’d like to help co-create that money-saving ecosystem by the year 2020, or benefit from it as a DIY homebuyer or seller, please follow #RE2020 online (or contact RealEstateCafe@gmail.com)

As shown on the tweet above, we hope to collaborate with a powerful new coalition of consumer advocates (which includes AARP and the White House) to extend their call for fiduciary reforms from financial services into real estate.  For more information, visit http://SaveOurRetirement.com or follow the hashtag #SaveOurRetirement .

Posted in Consumer protection, Defensive Homebuying, Disrupt Real Estate, Dual Agency Detective, Investigative Reporting, RE2020, Real Estate Consumer Bill of Rights, RECALL: Real Estate Consumer Alliance | No Comments »

CFPB & FTC protect options, empower real estate consumers to save money

ZillowAntiTrust_FTC1

What a week!  Inman News just caught the government doing it’s job, again!  As regulators from the CFPB are taking heat from bankers to take down their new site encouraging homebuyers to exercise their right to make informed choices, the FTC is putting the heat on the Zillow-Trulia merger because the sweetheart deals that Zillow has negotiated with giants in the industry have a detrimental impact on choices homebuyers may be able to make, too. Check out their deal with Realogy below:

Regulators may be weighing impact of Zillow-Trulia merger on small brokers

The article above is limited to subscribers, but sharing my comment here so consumers better understand the way public and private policy decisions ignore their needs, limit their choices, and deny their rights.

COMMENT: Thank goodness the FTC is raising these issues, but it’s more than just the price agents pay for ads.

1. First, giant real estate franchises and brands are not introducing money-saving alternatives for homebuyers and sellers, smaller start-ups and “SOLOpreneurs” are — particularly those of us offering fee-for-service real estate consulting models.

2. It’s been six months since SeekingAlpha republished Citron Research’s statement below. At that time, we were able to document via screen captures that no competing agent ads appeared on Coldwell Banker listings locally. Has anyone else noticed the same pattern in their market?

“Zillow/Trulia already have in place a rock bottom deal with Realogy, the largest real estate agency in the world, that prohibits ALL OTHER agencies from advertising on their listings … and for this they pay a fee 95% less than any other agency pays. Not only is this deal unsustainable in the industry, we’re not at all sure if it’s even legal from an anti-trust perspective.”

http://bit.ly/ZTCoverUp

3. From the FTC’s perspective, that should raise issues about anti-competitiveness and rightly so. However, consumer advocates like CAARE might be equally concerned that Zillow’s preferential policies steer homebuyers into conflicts of interest without informed consent — a high legal bar that is rarely attempted in real estate, online or off!

http://CAARE.org/designatedagency

Regardless of how the Z-T merger proceeds, hope the FTC investigation underscores the long overdue need for “Smart Disclosures” at the browser level to replace paper disclosures that real estate agents routinely ignore offline with impunity.

+ + +

If you’d like to be part of efforts to reform the real estate industry and empower consumers to save billions of dollars annually, please visit http://bit.ly/JoinRECALL and follow #RE2020.

Posted in Consumer protection, Defensive Homebuying, Dual Agency Detective, Fee-for-service, Fee-for-service real estate, Investigative Reporting, RE2020, Real Estate Consumer Bill of Rights, RECALL: Real Estate Consumer Alliance, Savings & Rebates | No Comments »

Collaborating with housing & real estate labs to save BILLIONS annually!

 

Concept Drawing:  reVRM2020 Ecosystem

Concept Drawing: reVRM2020 Ecosystem. Open ecosystem in real estate will be informed by personal data and create unprecedented money-saving opportunities for DIY homebuyers and sellers. Concept drawing shows one of 22 idea starters included in reVRM-Minifesto.

This morning, NPR listeners in Boston were greeted with news of one of the largest gifts ever given to MIT — a $118 million gift to MIT’s Center for Real Estate (MITCRE) to “advance socially responsible and sustainable real estate development.” MITCRE calls the gift “transformative” because it addresses inter-disciplinary challenges and presents an opportunity for existing academic initiatives to co-create solutions.

For decades, MIT’s Department of Urban Studies & Planning (DUSP) has championed citizen participation, so hope this gift also seeds a ripple effect in local communities. Here are four idea starters that could begin immediately in Greater Boston and beyond:

1.  Headlines from the annual Consumer Electronic Show say a race has begun to control the data from SmartHomes:  Why not extend the buzz from SmartHomes to SmartNeighborhoods by seeding a network of local user groups through sites like http://NextDoor.com

2.  When it comes to personal data, MIT’s Media Lab is a global thought leader.  Why not give academics there an opportunity to field test their work by using real estate as a use case? Pointing to Sandy Pentland’s article in the Harvard Business Review, this post extends his call for a New Deal on Data to a new deal on real estate data.

Invitation: Using Real Estate as use case for Personal Data (share http://bit.ly/reDataUse)

3.  Finally, when one in four homes sells for $100,000 over asking price, think it’s time for a Bidding War Lab? That’s what happened last June in Cambridge, MA, and price distortions in other cities caused the New Yorker to write about the negative impact global real estate is having on local markets — including making homeownership IMPOSSIBLE (emphasis added) for much of the city’s population..

Will Bidding Wars trigger local regulation or global reformation? (share http://bit.ly/BidReform)

4. Finally, Boston’s new mayor Marty Walsh is fond of asking what will Boston look like in the year 2030.  Before too many of the proposed 53,000 new housing units break ground, why not ask what will the real estate ecosystem look like in 2020 and co-create ways to reduce housing transaction costs?

When a representative from Zillow was asked where the real estate industry would be in five years, he predicted a “completely open ecosystem.” As that happens, consumers — both buyers and sellers — will save billions of dollars annually as diagrammed in the concept drawing above. Those savings will dwarf the $118 million dollar gift MIT just received. Respecting the extraordinary generosity of MIT’s donor, perhaps a generation of DIY homebuyers and sellers should crowdfund their own innovation lab to work on the ideas above.

How realistic is that? Here’s some math that might surprise you. Last quarter (4Q2014), approximately 15,600 residential properties failed to sell across MA, so those MLS listings were canceled or expired. If those properties were sold “for sale by owner” (or FSBO), that would save nearly one quarter billion dollars or twice the gift to MIT. If sellers used new money-saving real estate business models to reduce commission by half, they would still save an estimated $127M.

With such a large payback in one state, during one quarter alone, why aren’t money-savings real estate business models attracting more attention in the media and marketplace? (link)

With Bloomberg Philanthropies $1.35M to fund Boston’s new Housing Innovation Lab over three years and Samuel Tak Lee donation of $118M to fund MIT Real Estate Entrepreneurship Lab, what would happen if a generation of DIY consumers, tech innovators, and real estate consumer advocates collaborated with those new labs to transform the real estate industry?

If you’d like to join or follow that conversation, using hashtag #RE2020 on Twitter, Google+, and Facebook.  Glad to meet anytime on short-notice to address this question:

Reform or disrupt? Where will real estate be in 5 years? #RE2020 (share http://bit.ly/SeedRE2020)

And invite tech innovators and consumer advocates to meet during MIT’s IAP to discuss these game changing idea starters:

reVRM-Minifesto: 22 Game Changing Idea Starters (share http://bit.ly/reVRMgameChanger)

What’s your vision of the future of real estate?

Posted in Bidding wars, Commission Reform, Crowdfunding, Disrupt Real Estate, FSBO: For Sale By Owner, IntentCasting, RE2020, RECALL: Real Estate Consumer Alliance, reVRM, VRM | No Comments »

Pocket Listings: Smoking gun outs conflict of interest in real estate

 
opposingteams

The first round of Real Estate is Broken, a hard-hitting agent-to-agent critique of the residential industry last week in Boston, began with this one-two punch:

“When I grew up in the industry, pocket listing was a bad word; now Zillow has a category for pocket listings called ‘Coming Soon.’”

That rant echoed a headline three months earlier in Inman News that predicted, Zillow’s new ‘coming soon’ feature puts pocket listings on steroids.

Given Zillow’s scale and market penetration, it’s not hard to imagine that “Coming Soon” will institutionalize a two-tier housing market: pre-MLS listings and active MLS listings. Like pocket listings that are shopped in-house at company meetings as described below, “Coming Soon” will pressure homebuyers into dual agency and designated agency relationships so they don’t miss their “dream property.” (And brokerages get to collect both sides of the commission.)

Think we’re exaggerating? Read this “smoking gun,” an excerpt from an email sent to one of our buyer agent referrals:

“If we do not sign “dual agency” I believe that we are doing you a disservice. Let me explain why. Our office has approximately 70 agents, we meet for weekly marketing meetings, we discuss our buyer needs, and many times an agent at the meeting has a seller who is then contacted and a deal is put together. This is before it has ever hit the “open market” or MLS. By us not being able to use dual agency we would not even be able to promote your needs at our company meeting!! I am willing to not personally represent you and a seller if that makes you more comfortable, but I think that if you don’t even want me to represent you if anyone in my entire company has a listing, then you may very well miss out on your ‘dream property’.”

If pocket listings result in class action lawsuits someday, as Sam DeBord posited in his column on January 22, 2014 in Inman News, think the explanation above meets the legal test of “informed consent”?

http://bit.ly/PocketLiability (please share this URL via social networks)

Rather than manipulating buyer with fear of loss, what if the law required agents to record themselves as they explain risks or loss of benefits of agency options before buyers or sellers give up their right to be represented by their own agent, without conflict of interest?  Think many agents could provide sufficient information to obtain informed consent — Or is the industry so immersed in conflicts of interest that they see nothing wrong with the picture above?

Or what if the tables were turned and homebuyers present their own contract terms which agents could accept — like the Pledge of Allegiance authored two decades ago by the State of New York.

http://www.caare.org/PledgeOfAllegiance (please share this URL via social networks)

Or better still, what if buyers and sellers could simply exchange their own IntentCasts pre-MLS and involve agents if and when they want, at a price the consumer sets?  To some extent, that’s already happening with and without the benefit of technology.

Those are among the Idea Starters in our reVRM-Minifesto, a vision of an open ecosystem in real estate by 2020.  If you’d like to cocreate that future, follow #RE2020 or contact us to begin meeting on and offline.  You can help simply by sharing this URL via your social networks:

http://bit.ly/SeedRE2020

Posted in Bidding wars, Buyer agent, Consumer protection, Defensive Homebuying, Designated Agency, Dual Agency Detective, IntentCasting, Pocket Listings, RE2020, VRM, Whisper listings | No Comments »

Real estate rebels plan Boston Realty Party to document slowdown, plot reforms

Which way are Boston housing prices headed in 2014?

Which way are Boston housing prices headed in 2014?

NEWS FLASH: Thanks to Boston.com’s real estate blogger for validating the off-season price reductions we discovered and picking some transactions out of the data to write his blog post today. Homebuyers, please share this 140 character message via Twitter or other social media to ask your friends what they are seeing:

Want inside information on the Boston Realty Party we’re exploring / planning to discuss where housing prices are headed in 2014? Please email realestatecafe@gmail.com if you’d like to collaborate on data analysis, content creation, or simply participate in roundtable discussions on price trends and industry reforms. We’re toying with some mock awards — maybe even bobble head dolls — for bidding wars and deceptive business practices.

We’re eager to hear from fellow real estate rebels: fee-for-service real estate consultants, exclusive buyer agents, and DIY homebuyers who love to crunch numbers (or have post-bidding war trauma syndrome from the first half of 2013 and watch to regulate blind bidding wars in the future).

If you think real estate is the sleeping giant of the consumer movement, and would like to brainstorm how tech-savvy homebuyers and sellers would organize the real estate marketplace if the MLS (multiple listing service) did not exist, we’d love to hear from you!

Posted in Bidding wars, Bubble Hour, Consumer protection, Defensive Homebuying, Dual Agency Detective, Housing forecasts, Idea Bar, Pocket Listings, Real Estate Consumer Bill of Rights, RECALL: Real Estate Consumer Alliance, Seasonality, VRM | No Comments »

What’s really happening with luxury single-family homes across Massachusetts?

Price Reduction by Luxury Price Range:  Single Family Homes in MA as of 5/6/13

When it comes to real estate stats (or should I say spin?), Lily Tomlin was right: “No matter how cynical you become, it’s never enough to keep up.”  Blog posts and press releases last week from Redfin, Mass. Association of Realtors, and Hammond Real Estate are the most recent examples.  What’s your reaction to hyperbolic statements like this from a recent guest blogger on Curbed Boston? “Take my advice and at the next jam-packed open house, box out the competition and bid as much over-ask as you can.”

Before cynicism morphs into contempt, remember neither can inform home buying decisions, particularly offers, without competent, comprehensive, objective research.  That’s why one of the Real Estate Cafe’s missions is to protect homebuyers by questioning assumptions, debunking half truths, exposing facts and posing counter arguments.

Here are ten recent examples:

1.  Last week, tech-darling Redfin issued a press release on the luxury housing nationwide that was republished by the Wall Street Journal and other publications.  According to one of their local agents, “The luxury market in Boston is seeing the same level of competition and shortage of homes for sale as the rest of the market.”  Really?  That comment echoed the Mass. Association Realtors who said, “Buyers came out in force to make offers on the limited number of homes for sale in April.”  Limited, really?  Not in the luxury price range; at least not for single-family homes.

  • Fact 1: Our analysis of single-family homes priced over $1.4 million shows approximately two years of MLS inventory based on sales during a three month period ending May 6, 2013.  Unsold inventory varies by price tier,  from 16 months in the $1.4 to $1.85M price range to 57 months — or nearly five years — in the $5 to $10M price range.
  • Fact 2:  MLS stats show that Redfin was only involved in one closing over $1.4M in Massachusetts between 2/7/13 and 5/6/13, so maybe their assessment is based on luxury condos (which were not included in our ongoing analysis).

2.  Hammond Real Estate also extended the industry’s “low inventory” and “bidding war” mantras to luxury homes, insisting that “…the new norm finds buyers in multiple-offer situations due to an increasing shortage of properties. Agents are educating their clients about the current state-of-the market, and buyers are preparing themselves for situations that require them to make quick and strong offers. Many properties are being sold over the asking price, as was the case with 130 Mount Auburn Street.”

  • Fact 3:  During the past three months (2/7/13 – 5/6/13), less than 10% of single-family homes sold over $1.4M were over asking price — that’s a mere 15 sales across Mass!
  • Fact 4:  Only 7 of those 15 homes sold for more than 2% over the seller’s asking price!  Big deal, right?
  • Fact 5:  One of the two listings featured in Hammond’s press release had been on and off the market for more than a year and a half before selling for $2 million — or more than 36% — below it’s original asking price of $5.5 million in September 2011.  Would you believe the final sales price was also $777, 800 below the assessed value published in the MLS?

As that sale proves, it’s still possible to get a single-family home in Massachusetts for approximately $1 million below it’s original asking price.

  • Fact 6:  In fact, seven of the 24 single-family homes sold over $2.85M during the three month period we studied were “Million Dollar Markdowns.” (see footnote below)

3.  So our question is why “bid as much over-ask as you can,” when less than 10% of luxury single-family homes sold during the past three months were over asking price and when you may still be able to save six to seven figures?

  • Fact 7:  As our graph above shows, price reductions of more than 10% are common across all six luxury price ranges studied in our three month snapshot.  So why does the press focus on the seven sales more than 2% over asking price, when 205 luxury single-family listings have reduced their asking prices by at least 10%?
  • Fact 8:  Almost 15% of the homes priced over $10M have reduced their asking price by more than 20%; so apparently the more money you can spend, the more you can save!
  • Fact 9:  Would you believe that 37 luxury single-family homes across MA have reduced their list price by approximately $1M off the original asking price, and another 67 have reduced their price by approximately one half million?

Call for public investigation?

Compare our fact checking above to industry statements and ask if there is a point at which real estate spin becomes false advertising or part of a pattern of deceptive trade practices?

The press release we’d like to see would be out of the Attorney General’s office or maybe the Consumer Financial Protection Bureau. It would read:

  • Fact 10:  Only a handful of bidding wars drove prices $100K or more over asking price on luxury single-family homes in Massachusetts during the three months studied.
  • Fact or just our professional opinion?  For the second year in a row, an unsettling number of those involved in-house sales at well-known real estate brokerages.

Won’t it be wonderful if the same press released announced, “Federal and state regulators are investigating the role that dual agents and designated agents — aka “counterfeit buyer agents” — play in manipulating buyers, particularly in-house buyers, involved in bidding wars”?

Footnotes:

  1. Rounding up, our research defines “Million Dollar Markdowns” as listings that have been reduced by $850,000 or more from their original asking price; and half million dollar markdowns were reduced $450,000 or more.
  2. This blog post was written before learning about the lead story in Banker & Tradesman entitled, Luxury Market Soaring, dated tomorrow, Monday 5/20/12.  Unfortunately, we are not subscribers so cannot access that article online.  That article should be worth reading because it will most likely include all residential sales in Massachusetts, whereas our three month snapshot was limited to listing data published by MLSpin.com which covers most but not all of the state.
Posted in Bidding wars, Bubble Hour, Buyer agent, Defensive Homebuying, Dual Agency Detective, Luxury buyer agent, Luxury homes, Million Dollar Markdowns, Price reductions, Sweetest Deals | No Comments »
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