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Use Pi Day to explain, hack the way the real estate commission pie is sliced?

BCA596BE-7489-420A-8545-7262DBA17902IDEA STARTER:  Should #RE2020 use Pi Day, the celebration of a never-ending number to celebrate the approaching end of the bloated, two-side real estate commission pie?

Real estate is not rocket science nor is it complex math which is why it might be fun to poke fun at the obsolete, two-sided real estate commission pie on Pi Day, Thursday, March 14 — 3.14.  We’ll use the occasion to talk about:

  1. How the current system evolved;
  2. Why it’s being challenged; and
  3. How to select money-saving options now and in the future.

The topic is timely because a massive class action lawsuit was brought against real estate giants last week, National Consumer Protection Week 2019.  If you visit the first link in the tweet below, you’ll find new stories are hitting the press:

Regardless of the outcome of the suit, you won’t need to wait for the Mass Office of Consumer Affairs or Attorney General’s office to learn on how to save money by working with a real estate company that rebates a slice of the commission pie.

Although @RealEstateCafe has been offering industry-leading rebates for years (see WSJ from 15 years ago), we believe rebates are overrated.  They’re potentially only a fraction of the value an experienced buyer agent can add.  Here’s Real Estate Cafe’s track record:

http://bit.ly/Shop4EBA (share via social media)

Text 617-661-4046 to meet on demand

To fit into your schedule on #PiDay, we’re willing to meet on demand OFFLINE on the MIT campus or anywhere in Greater Boston easily accessible by T.  If there’s enough demand, we’ll post a schedule online, and schedule 15 to 45 minute slots to meet over coffee or our favorite, over beer (we call it #REonTap).

 SPECIAL OFFER:  Save $314.16

If you want to minimize commission costs and other hidden costs in the traditional reactive house hunting process, we can also explain our Proactive House Hunting strategies.  If you become a #ProactHH client, we’ll deduct $314.16 from our $1K retainer fee.

Posted in #REonTap, Commission Reform, Consumer protection, Discount real estate, Proactive househunting, Real Estate Consumer Bill of Rights, Real estate rebates, RECALL: Real Estate Consumer Alliance, Savings & Rebates, Unbundling the Commission

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

Can CoBuying, CoLiving & local preferences help Generation Priced Out?

Is it unreasonable for Millennials, GenX and members of future generations who are born in Cambridge to aspire to settle in their hometown, or afford something nearby without competing with foreign buyers, aka #SpeculatorsWithoutBorders?

For Generation Priced Out and their parents who see them struggling with student loans and unprecedented housing costs, a year-long debate in Vancouver goes to the heart of the affordability crisis in Greater Boston:

“Should young working British Columbians be forced to subsidize those who are using foreign funds to out-compete them for housing? Would you accept that situation if you were in their shoes?”

http://bit.ly/VanSpecRETax (share article above via social media)

Don’t know the details, but for 50 years Switzerland has restricted foreigners buyers, Singapore has imposed both a 15% foreign buyer tax and multi-tiered speculator tax on domestic investors.  By a unanimous vote, the Cambridge City Council recently authorized the town assessor to explore different ways to impose a real estate transfer tax, but unlike Switzerland they’re NOT protecting the existing affordable Inventory or “naturally occurring affordable housing.”

If authorized by the state, the transfer tax will redistribute real estate wealth through the PUBLIC SECTOR, raising policy questions about the best ways to leverage the annual flow of funds to create a multiplier effect.  Will the funds be limited to new construction or used more creatively to create the greatest good for the greatest number?  Will funds be allocated without regard to buyer profiles, or will weighting criteria give preferential treatment to local residents and other factors (as they currently do in some other affordable housing programs)?  Hope to explore those questions by inviting affordable housing advocates, the Interfaith community as well as #FinTech & #RETech innovators to “hack” the #RETransferTax:

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

Regardless of how transfer tax funds are distributed, market stats reveal that something is already happening in the PRIVATE SECTOR — families, friends and new financing tools have created a surge of CoBuying as shown in the Realtor Magazine article above.

CROWDSOURCING

Any insight into CoBuying in the Boston / Cambridge SMSA?  Is it true that 1 in 4 sales already involve CoBuyers, not family gift money but real people buying together?  Are these friends, unmarried couples, parents guaranteeing loans, or some shared equity entity taking a percent ownership?  Regardless, is this a healthy trend or a sign that the housing market has overshot market fundamentals because external demand — investors, speculators, institutional buyers — have skewed affordability.

Note:  Contrary to expectations, housing prices in Seattle — another tech-driven hub popular among foreign speculators — have fallen 11% in the past six months.  Does that foreshadow a price correction in Greater Boston; and if so, will Cambridge be impacted or immune?  Whether you’re a homebuyer thinking about buying a home this Spring because interest rates are at their lowest in 10 months, or an empty-nester thinking about timing the top of the market, how do these revelations influence your plans?

Instead of an gridlock, is there potential for an intergenerational WIN – WIN here?  What might that look like has generated nearly 60 comments on NextDoor, content accessible to local residents only.  At two Cambridge Envision Housing meetings, local residents asked what could be done with large homes to create affordable housing?  Nationally, four million baby boomers already live in roommate groups of three or more, hence the phrase the “Golden Girl” movement.  Lifting the four-person cap on unrelated individuals living together would open the door to new forms of CoLiving, even intergenerational or intentional micro-communities.  Invite fellow real estate innovators and affordable housing advocates to seed some demonstration projects, if not in Cambridge — somewhere displaced residents feel at home in a “New Cambridge” of their own making.

Carpe Diem:

Anyone want to begin discussing CoLiving and CoBuying options offline tonight in Cambridge?  Join us for FREE beer samples, 5-6pm tonight (2/21/19) at our next #REonTap at Cambridge Common restaurant.

If you can’t make tonight’s event, we’re glad to TweetUp anytime, just DM via http://bit.ly/REonTap

Posted in #SpeculatorsWithoutBorders, Affordable housing, Co-Living, Consumer protection, Downsizing, Great Senior Sell-Off, Group buying, Intentional Communities, Mlllennials, Real Estate Roundtables

WANTED: Cathedral builders to transform intergenerational housing gridlock into community

Generation_HousingGaps_VanityFair1

 

“When I’m 64…” the first time I heard those lyrics from the Beatles‘s classic song that destination seemed two centuries away, now it’s only two days.

The head of MIT’s AgeLab says that some aging babyboomers will live two decades longer than parents who died in their 60’s or early 70’s like my own.  How we reinvent that period will be the “Cathedral building of our time.”

Love that call to action because it elevates heathy aging to a spiritual path while acknowledging implications in the physical world, both the built environment and housing market.  In a single generation, the increasing size of homes and falling birth rate have tripled the amount of living space per person, rising from 300 square feet to 900 SF.

Sustainability questions raised by that level of consumption collide with housing affordability and headlines:  babyboomers can’t afford to downsize when the asking price of starting condos is nearly $1,000 per square foot (based on one bedroom unit with less than 500SF in Cambridge.)

As babyboomers compete with Millennials for smaller less expensive condos in urban areas, an intergenerational crisis could unfold that pits locals against each other as well as real estate speculators —- foreign investors, flippers, AirBnB operators, and institutional or iBuyers.

Instead of cannibalizing community; there’s also the potential for a resurgence.  For example, the “Golden Girl” movement has gone organically — an estimated 4 million babyboomer women living in roommate or home sharing groups of three or more.  At college reunions, conversations about downsizing mingle with aging well.

Why?  The science is in:  strong social bonds increase longevity and joy, which is at the heart of both spirituality and feeling forever young.  Real Estate Cafe is developing a series of roundtables and field trips to explore more than a half dozen different models of living in community.
 
Call to Action

We first identified 10 trends pointing to group Housing in 2013, cohosted a
#MicroHousingLab in 2015, submitted a proposal to the Boston Foundation to prototype intergenerational 21st Century Villages, been invited to cocreate standards for an OPEN HousingID, and shared how they can help people find home, their own utopia.

What’s the community or cathedral you’d like to build, or are already building and how can we collaborate?

Posted in "We" companies, Affordable housing, Co-Living, Creative class, Great Senior Sell-Off, Group housing, HousingID, Intentional Communities, Mlllennials, Real Estate Roundtables

Homebuyers: Need offensive & defensive game plans or occasional coaching?

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Thinking about buying a home in 2019?  Yes, it’s pre-season — but got a game plan?  Last night’s Super Bowl victory was also a lesson in the importance of systems or game plans.  The offense and defense both have game plans, with plays to use in specific down and distance situations on both sides of the ball.  Last night, the New England Patriot’s demonstrated that defense wins games.

What wins games from the homebuyer’s perspective? Getting the home of your dreams is the cliched response, so why not start there.  Don’t start with down and distance situations, start with the goal line — what does your end zone look like?  How will you know when you’re in YOUR red zone — not something you saw on HGTV, or the next home to come into the MLS, but a place that can deliver the lifestyle and happiness you seek.

During several sellers’ markets, RealEstateCafe has developed a system to help house hunters get into their end zone.  We call it Proactive House Hunting or #ProactHH.  It involves some familiar plays, including some you call do on your own.  But the execution you see in a touch football game doesn’t compare to the precision of innovation and best practiced evolved over decades.

Over the past 5 years, the speculative cycle in real estate has been driven, in part, by performance-enhancing drugs — record low-interest rates.  Steroids are outlawed in football and other sports but go into any health club and you can see evidence they’ve not disappeared.  In contrast, in the final months of 2018 homebuyers got a look at a housing market that was no longer juiced by historically low-interest rates.

What will 2019 bring?  Asking that pre-season question is like predicting next year’s Super Bowl winner.  It’s impossible, but it’s possible to identify systems that have produced winning results.  This year, we’ll be refining our game plans on both sides of the ball — #ProactHH on the offensive side and #DefensiveHomebuying on the other side.  We’re always learning, always adapting our system, always responding to down and distance tendencies on game day– like the Patriots.

Just as a team with a good game plan can beat a team of better athletes, we can help you outsmart the housing market if you’re ready to get started pre-season.  Email us to talk offline about our Menu of Fees & Rebates at the earliest convenience as boutique buyer brokerage practice only works with a handful of clients.  We’re already preparing scouting reports to help them save money.  Peek into our huddle if you’d like to see a sample:

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

Posted in Buyer agent, commission rebate, Creative class, Defensive Homebuying, DIY Homebuyers, iCovery, IntentCasting, Proactive househunting, Savings & Rebates, Seasonality

Homebuying 101: What is the highest form of agency?

Disclosure cartoon

To my surprise, one of real estate’s thought leaders posted photos on Facebook today from an event 25 years ago in Boston we hosted called the Consumer Revolution in Real Estate. Last November, the National Association of Realtors hosted their 1st national convention in Boston, literally just down street from our event in 1993. If you scan the agenda below, you’ll see that the first two sessions were the Growth of Buyer Brokerage and The Dual Agency Debate:

http://bit.ly/ConsREv_Agenda1993 (share link via social media)

From my colleague’s perspective, the controversy surrounding those two hot button issues can be filed under “Some things never change.” But to consumer advocates like #RealEstateCafe and the buyer brokerage community, a new report by the Consumer Federation of America called The Agency Mess presents an opportunity to ask one simple question of our peers and the public:

What is the highest form of agency?

Has that changed over time, or is it one of those things that never change?

Implications for industry & consumers

Next week, thousands of leading real estate agents and RETech innovators will participate in a week-long real estate technology conference in NYC. If you scan the topics on just one day, Tuesday, 1/29/19, you’ll see that one’s perspective on agency will shape what’s said and NOT said on multiple panels:

  • Top Teams Divulge Their Most Closely Held Secrets
  • The 6 Legal Pitfalls That Can Do You In
  • What The Brokers Will They Could Tell Agents

When discussing hot button issues, the content and tone has sometimes been adversarial in the past but multiple stakeholders can dialogue about fiduciary duties in real estate with civility. One way is to focus on the good:

  • How can we make it easier for real estate agents to be good and do good?
  • How can we create, or better cocreate, systems that produce good outcomes?
  • Can we still reach a consensus about what is good and how goods should be distributed?

We could engage those questions at multiple levels from the metaphysical to legal, but rather than talking until we’re blue in the face like the agency disclosure cartoon above or trying to unsnarl the Agency Mess — the title of CFA’s latest report, our initial goal is simply to reach concensus from consumer’s perspective, both homebuyer or seller, about the baseline:  What is highest form of agency?  Then we can go on to other agency options and bigger questions.

Highest form of agency for taxpayers?

As a real estate consumer advocate, would argue that questions about what is the highest form of agency also extend to taxpayers; because collectively, we guarantee 9 of 10 residential mortgages. That underlines the importance of reaching a consensus about what is good and what serves the common good as well as individual homebuyers and sellers.

Posted in Best of Breed, Buyer agent, Consumer protection, Crowdsourcing, Defensive Homebuying, Dual Agency Detective, Dump Dual Agency, RE2020, Real Estate Consumer Bill of Rights, RECALL: Real Estate Consumer Alliance

Impact Investors: Reward homebuyers for Social Good or Community Building?

WomenMarch2017_WBUR

Two years after the Women’s March, why share the Facebook post below — a message sent to a closed group of leading real estate agents across the US? As a daily parade of headlines and talk shows attest, there’s growing recognition that the resistance is winning and the climate is losing. The president may have removed references to climate change within hours of his inauguration but world leaders and others are committed to building a better future.

Like doctors who recognize climate change as a public health crisis, real estate agents are morally obligated to respond — to take responsibility for protecting future generations.  That’s the role of #FutureFiduciaries.

A generation of Millennials are facing unprecedented headwinds; and like MLKing, Real Estate Cafe wants to recognize #WhatAreYouDoingForOthers. That means rewarding student debt-burden homebuyers with Social Good or Community Building commission credits to make it easier to use our fee-for-service, rebate model.

For nearly 25 years, our mission has been helping consumers saving money and we’ve done that well (see saving stats in Do buyer agents really help consumers save money?  Now we’re exploring new directions: can we help investors do good while doing good? That might include a range of innovative opportunities:

  • Experimenting with CoBuying and Rebate Sharing;
  • Developing a money-saving P2P real estate platform coop.
  • Using Impact Rebates to fund social justice projects of your choice.
  • Crowdfunding intergenerational, intentional communities — CoLiving, CoHousing, etc.

As #RE2020 shows, we like to collaborate with innovators, change agents, civic and housing activists who think and dream big. Want to cocreate a better future together?  Text 617-661-4046 so we can meet offline.

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Posted to agent-only Facebook group, Inman News Coast to Coast, January 23, 2017:

Did anyone from #ICNY, or their current or past clients, participate in the protests in 600+ cities over the weekend? Unrelated topic? Think again.

http://bit.ly/WomensMarchWBUR

As ICNY ended, the 45th president was sworn into office. Hours later, references to climate change were removed from the White House website and Trump betrayed low and moderate-income homebuyers, reversing Obama’s mortgage fee cuts:

http://bit.ly/TrumpRETax

The same weekend, millions took to the streets worldwide to protect their rights and future generations. Photos from this worldwide show of solidarity are truly awesome:

http://bit.ly/WoMarch2017

Brad’s kickoff address last week was entitled, “We Are in the Future: Now What?” Brad asked how the compression of time will reorder the transaction; but outside the industry, populism is shaping a new world order. What implications does that have real estate professionals and the planet? At 11am EST today, a nationally syndicated NPR talk show will talk about “civic activism in the age of Trump.”

http://bit.ly/WoMarchFuture

In the financial and legal world, the word “fiduciary” describes the role of the protector; so without claiming the label, millions who took to the street were “Future Fiduciaries.” Where will their collective resistance lead in the future? Listen to the talk show below, and get involved. Here’s an example of one petition you or your clients can sign to protect the future of the planet.

Please sign & share this petition:
http://bit.ly/FutureClimate

If you’re a real estate professional, want to convene a conversation about the role of fiduciaries in the Trump era using the hashtag, #FutureFiduciary? If the masses are being politicized and mobilized, will they transfer their values and expectations into the marketplace and chose to work with real estate professionals who are willing to protect their rights and the planet? Here are some thoughts about protecting real estate consumers in DysTrumpian era, what are yours?

http://bit.ly/ProtectREra

Posted in #REonTap, Affordable housing, Buyer agent, Co-Living, Crowdfunding, Housing Justice, Impact Rebates, Intentional Communities, Mlllennials, Pope's Encyclical, RE2020

Hack the #RETransferTax:  What would MLKing do?

Housing Justice is emerging as a political issue, and real estate transfer taxes present an opportunity to redistribute wealth.   Cambridge, Somerville and Boston are first movers on a real estate transfer taxes proposed in cities and towns across Massachusetts, as documented in the lead story in the Boston Globe above.  Could real estate transfer taxes help the state live up to it’s name — the Commonwealth of Massachusetts?  What role might faith communities play developing and implementing potential options?  That question generated our highest engagement rate on twitter ever!

What if faith communities worked with the FinTech / RETech / PropTech community to explore options and policy implications?  What would MLKing do?  We asked a similar question 5 years ago but policymakers failed to act then:  Will runaway bidding wars create real estate refugees in Cambridge? What would MLK do?

Hackathons are creative ways for anyone to generate ideas — time to invite multiple stakeholders to Hack the #RETransferTax?

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Dear members of the City Council,

From my perspective as an affordable housing advocate, the proposed real estate transfer tax is:

Not new,
Not bold, and
Not enough.

Those three strikes do not mean you should count it out. To the contrary, it’s a rallying cry to count more than luxury real estate transactions. Count on data in the MLS and count on people of God and goodwill. Really, data points to opportunities and scripture points to social justice teachings on redistributing wealth (and the roots of Habitat for Humanity).

Some might be impressed that a 2% transfer tax on 73 MLS sales over $2M last year in Cambridge would have generated nearly $4.4M in revenue, or approximately enough to build nine affordable housing units at $500K. What’s more impressive — or maybe depressing — is that the 7 homes in Cambridge sold $500k over their asking price last year. Yes, a half a million dollars over asking price generating bidding war premiums totaling $5M. In other words, bidding wars on just 7 luxury homes in @CambMA could build 10 “affordable properties” at $500K each.

Need one argue that the “Gilded Era” of Cambridge real estate has reached unthinkable heights? When winning bids soared $50K over asking price five years ago, some called it “crazy;” now that winning bids are soaring 5 to 10 times that amount, is it time to call it a moral crisis — or market opportunity?

Your answer may depend on whether you think Cambridge is blessed or cursed with an embarrassment of riches. You need not be a member of the clergy or a billionaire to answer that question. We can cocreate innovative responses by engaging multiple perspectives.

In a handful of hotspots around the world, 15% transfer taxes are foreign speculators are finally beginning to tame housing prices. Should Cambridge follow their lead or can we engage the local FinTech / RETech community to do something new, something innovative, and something that leverages the “holy use of money?” For some in the faith community, that’s a moral imperative; for others in the social good community, it’s an opportunity to demonstrate the innovation economy that’s attracting global wealth to Cambridge.

That concentration of wealth begs for a response of biblical proportions. Let’s show the world what’s possible in this City of God and civic good. It’s a fitting rallying cry as we approach Martin Luther King Day.

If God-talk tunes you out, then tune into this: Last year, the PropTech sector attracted $12 BILLION in funding. Can we count on their participation if we begin redistributing real estate wealth, not by focusing solely on a real estate transfer tax but by envisioning and leveraging financial incentives that work within and outside the existing real estate ecosystem?

Let’s see if we can do something new, something bold, and something that exceeds our expectations. Thank you for the opportunity to share my perspective.

Posted in #SpeculatorsWithoutBorders, Affordable housing, Crowdfunding, Crowdsourcing, Housing Justice, Housing policy, Idea Bar, Impact Rebates, Luxury buyer agent, Real Estate Roundtables

Want an EFFECTIVE Buyer Agent (or Listing Agent)? Better Shop Around

Shop_Around_Lyrics

Eating lunch at the Cambridge Common near the Harvard Law School, and the overhead speakers are playing a 1960’s classic from Smokey Robinson & The Miracles with the prudent advice above, “you better shop around.”

The same words could apply to homebuyers and sellers according to a new report by the Consumer Federation of America on the Agency Mess in real estate.  It’s creating a ripple effect around the country, in part because real estate consumers too often work with the first agent they meet or a friend who may be new to the industry. You can skip all of the broker babble and get quickly to the bottom line by following the money.

Ask anyone — friend or stranger who offers to serve as your buyer agent whether their office offers a zero tolerance conflict of interest policy and what their track record is as a buyer agent.  Don’t let anyone trick you into working with a fake buyer agent (aka. Designated Buyer Agents), ask for MLS stats to prove they’ve been an EBA — EFFECTIVE Buyer Agent when it comes to the bottom line.

Our measure of that effectiveness is simple:  have you helped homebuyer clients save money?  Here’s a summary of our performance since 1995:

Summary:

1.  Sales volume:  Approx. $50M in sales over 48 MLS sales since 1995 — 23 years ago (excluding non-MLS transactions, eg. Proactive House Hunting).

2.  Approx. $1.2M in gross commissions over 23 years, most of which has been rebated to buyer clients who pay hourly fees for services as they are rendered. Rebates effectively allow DIY homebuyers to get a return on the time they invest during their house hunt.

3.  Bill Wendel, broker at Real Estate Cafe, has saved homebuyer clients $6M or 5 times his gross commissions.  Rebates are in addition to the $6M saved by advocating for homebuyer clients.

Savings:

1.  Negotiated $2.6M off the last listing price or a median of $15,200 in savings (before buyer agency commission rebate built into the sales price).  The average amount negotiated off was considerably higher, $55K per transaction.

2.  When price reductions and negotiated concessions are combined, the savings total nearly $6M.  That translates to a median total savings of $40,700.  Once again, the statistical average is three times higher — $124,109.

3.  1 in 4 homebuyers represented by Real Estate Cafe saved over $100K, when price reductions & negotiated savings are combined.

4.  Only 1 in 7 paid over asking price, with a COMBINED total of $81,000 or just a median of $7,000 over asking price.  In contrast, 1 in 4 homes sold for $100K over asking price in Cambridge, MA in June 2016.

5. Over nearly 50 transactions, homebuyers have paid an average of 92.4% of the original asking prices.  Median sales prices are even lower — 91.5% or a savings of 8.5%.

6. Nearly 1 in 3 homebuyers represented by Real Estate Cafe have saved 10% or more off the original asking price.

7. 1 in 4 has paid LESS than the assessed value of the property (as determined by the local tax assessment office not Zillow or any other automated valuation model).

Disclaimer:  Past performance does not equal future savings, but we’ll do our best to help buyer clients save money and avoid the 10 Hidden Costs of Reactive House Hunting.

 

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Listing Agent Report Card

 
If you’re on the seller’s side of the transaction, we can also make it easy to shop around.  Because we’re not competing to market your home, we use MLS data to identify the best candidates to interview.  We can also try to help you negotiate a lower commission, and if nothing else, guarantee some savings by rebating part of our referral fee to more than cover the modest cost of our Listing Agent Report Card.

Alternatively, if you want to try selling on your own as a FSBO — For Sale by Owner, we can offer a limited range non-agency services “a la carte” or act as a finder.  Either way, we won’t engage in any conflicts of interest.

Let us know how we can help you shop around, and save as a DIY homebuyer or seller.

Posted in Buyer agent, commission rebate, Discount real estate, DIY Homebuyers, FSBO: For Sale By Owner, Listing agent report cards, Luxury buyer agent, Proactive househunting, Real estate rebates, Savings & Rebates

Back to the Future: Do buyer agents really help consumers save money?

BidWarScorecard_Sample

Only one previous blog post during 2018 — is this another abandoned real estate web site?

Hardly.  While the housing market has been grossly overheated, and irrational exuberance drove bidding wars $100,000 over asking price; our attention as buyer agents, and leading industry reformers, has focused elsewhere.  Over the past three decades, Real Estate Cafe’s mission has moved from reforming real estate transactions to cocreating a new money-saving real estate ecosystem to addressing sustainability issues.

We’d like to close 2018 by asking a question we addressed a decade ago:  Do buyer agents really help consumers save money? 

http://bit.ly/RESaveEBA_2008 (Share link via social media)

The question is more urgent than ever:  One in three real estate agents has less than two years experience, so if you’re working with one of them, it’s unlikely that they’ve ever seen a down market.  In contrast, Real Estate Cafe has a track record of helping buyers save money during past market cycles, and like other seasoned observers, we see another coming.

If you’re thinking about buying a home during 2019, we invite you to talk about how to use both defensive homebuying and proactive househunting strategies to avoid the 10 hidden costs of reactive househunting.  Regardless of whether you employ those money-saving strategies, know that the real estate press is unlikely to document the leading edge of price changes that could save you save your tens of thousands or prevent you from engaging in a bidding war.

To fill that void, Real Estate Cafe offers research “a la carte” to help you make more informed decisions by analyzing MLS data to suit your needs.  Prices start at $99, and if you’re already working with another buyer agent we’re glad to explore agent-to-agent collaborations or simply offer a second opinion through RECafe-PRO.

Research a la Carte

Before we took a time-out, we developed a Bidding War Scorecard (see sample screenshot above) to protect our clients from overpaying for properties.  Our most recent market snapshot revealed some mega-savings opportunities in the luxury price range; more specifically, single-family homes priced above $2.5 million across Massachusetts during the 4Q2018.  Generally, it follows a pattern identified in this infographic from the Wall Street Journal:

WSJ_DualAgencyCosts

If you’re a buyer, and would like access to the research above on Real Estate Cafe’s intranet, we can provide access to some discussions.  If you become a client, we’ll draw from a wider knowledge base developed over past boom / bust cycles and invite your perspective to help make sense of the changing housing market in 2019.

If you’re a DIY homebuyer who’d like an industry leading rebate, or just advice “a la carte” from a buyer agent with nearly 25 years experience helping clients save money; call or text Real Estate Cafe at 617-661-4046 and we can discuss your needs over coffee or a beer.  See you at the next #REonTap?

Posted in #REonTap, Bidding wars, Buyer agent, Consumer protection, Defensive Homebuying, Housing bubble, Luxury buyer agent, Proactive househunting, Savings & Rebates, Seasonality
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