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Will vote to limit “Coming Soon” listings end practice of forcing buyers to trade agency for access to Pre-MLS inventory?

Shared a version of this DRAFT blog post on a closed Facebook group about 10 days before the Realtors’ preliminary vote today to limit Coming Soon listings. As a long-time consumer advocate / buyer agent who’s business has been starved by pocket listings, here’s my PRELIMINARY take on why homebuyers in inventory starved markets should applaud a move in this direction (but another real estate consumer advocate warns that the devil may still be in the details and other say NAR’s final vote maybe postponed).

SHARED WITH PEERS BEFORE VOTE

Consumer access vs Double-Dipping: NAR policy showdown exposes agency fraud inducement to get access to home Pre-MLS

Glad to see that some Wicked Smaht people, including a real estate educator named Jack Gately, are debating NAR’s proposed Clear Cooperation Policy before their annual convention in 10 days. Here’s my take on Jack’s video:

New from @SmahtAgent

The National Association of Realtors might do away with Coming Soon and pocket listings. https://t.co/D0wenf2Sid

#realtorlife #realtor #boston #realestate #inman #inmanconnect

— Jack Gately (@gatelywire) October 29, 2019 

EXCERPT:

“Now in talking with agents here in Massachusetts they’re using “Coming Soon” status for basically three ways: 1st to get DOUBLE COMMISSIONS by representing the buyer and seller equally. So during some period of time before they actually put it into the MLS, they have this “Coming Soon” status and they’re able to actually acquire buyers during this time, especially during a period of low inventory.”

Jack, Thanks for sharing your point of view. If I may paraphrase you, agree NAR is fighting two anti-trust class action lawsuits, and does not want a war on a third front relative to anti-trust.

My 2 cents? See blog post and smoking gun that documents how buyers are induced into conflicts of interest or agency fraud when they are effectively required to sign designated agency agreements to get pre-MLS access to Coming Soon and pocket listings:

RETeams_SmokingGun

http://bit.ly/PocketActionSUIT

Any other buyer agents agree that access for agency inducement has cannibalized our business, too? If this becomes a class action, how can we quantify the damage for the courts? I’ve been quite open about having the worst year ever, and blame it on the demise of the MLS, which as Rob Hahn said repeatedly before INLV, risks becoming the “dumping ground” for inventory that does not sell in-house:

http://bit.ly/MLS_DumpingGround

Been harmed by Coming Soon or Pocket Listing and fear what they are doing both to the MLS and homebuyers in inventory-starved housing markets? Let’s talk privately any time online or offline in Boston. If there’s enough interest, the adhocracy group RECALL — Real Estate Consumer Alliance — can host a MeetUp with other buyers agents if you’re attending NAR’s annual convention in SF, 11/8-11/19.

If you visit the link above, you’ll find that yesterday was the 27th anniversary of Ralph Nader’s first speech to the real estate industry, a gathering of buyer agents who’s ranks have been decimated by #GamesREAgentsPlay instead of expanding into the guardians of homebuyers. But Nader warned that might happen, and the #FakeBuyerAgents he predicted would arise benefit from the in-house sales of pocket and coming soon listings.

Bill Wendel
@RealEstateCafe
realestatecafe@gmail.com
617-661-4046

Posted in Buyer agent, Consumer protection, Defensive Homebuying, Designated Agency, Dual Agency Detective, Real Estate Consumer Bill of Rights, RECALL: Real Estate Consumer Alliance, Uncategorized, Whisper listings

Not just Peak #LuxRE, Boston home values have ‘likely peaked’ – GBAR

A month after we began asking tough questions about the luxury housing market, it seems that the Greater Boston Association of Realtors is also saying Boston Housing values have “likely peaked.” This tweet reflects some of the stats underlying their prediction:

That’s started a debate on BostonBubble, a peer-to-peer bulletin board homebuyers have used to track the overheated housing market locally since 2005. That crowdsourcing site is no longer closely moderated so we’re inviting thoughtful comments on our intranet. Here’s a sample if you’d like to join us, on or offline.

Guest comment on BostonBubble:

Home prices always peak from April to June and take a dive in the winter months, but spring of 2020 looks to be another year of price increases because rents are still going up. We really need a recession or rent control to truly tank the housing market.

http://bit.ly/BosRE_AptRentsNov19

Our reply:

Thanks for your comment and link from Curbed Boston. Can we invite readers to address your assertions, not to be adversarial, but to inform homebuying and selling decisions?

ASSERTION #1. Prices are seasonal, don’t mistake the margin movements this Fall with softening overall.

REBUTTAL #1: Agree prices are seasonal and changes month to month are easily documented by graphs. However, the median prices cited by GBAR are Year over Year and inspired this quote:

“These conditions have the realtors association suggesting the once unthinkable: That the Boston-area housing market—so long the domain of ceaseless escalating prices, vicious bidding wars, and often paltry inventory—might be turning in favor of buyers.

‘The sellers’ market is likely over, or at least the balance has shifted,’ Jim Major, president of the Greater Boston Association of Realtors.”

http://bit.ly/CurbCoolBosRE

ASSERTION #2. Rents are still going up so sales prices will likely increase in Spring 2020.

REBUTTAL #2: Rising rents do not increase purchasing power, they deplete it.
Further, the Curbed Boston article you shared ends by suggesting rents may begin to fall in 2020. “Perhaps now that the Boston area’s for-sale market is cooling a bit more tenants will jump into that and free up space in the rental market, thereby bringing rents down.”

ASSERTION #3. We really need a recession or rent control to truly tank the housing market.

REBUTTAL #3: The lowest interest rates in three years juiced purchasing power and prices earlier this year, but there’s only so much demand you can pull forward. Further, demography is destiny, so watch for more signs the housing market has reached a #RETippingPoint in 2020 as we enter the first phase of the Great Senior Sell-Off:

http://bit.ly/SrSellOff

+ + +

Glad to continue a friendly debate offline over coffee or beer nearly any evening. Working on a series of topics for #REonTap. What would others, particularly potential homebuyers or sellers who fear they may have missed the top of the market — #PeakRE, like to discuss in a friendly, civil way? Hope the content and tone of what’s written above attracts thoughtful responses, here, on Twitter or inside the RealEstateCafe’s private discussion room:

http://bit.ly/PeakAt_PeakBosRE

Posted in #REonTap, Bidding wars, Buyer agent, Defensive Homebuying, Downsizing, Great Senior Sell-Off, Housing forecasts, Real Estate Bubble, Seasonality, Timing the market

Asking tough questions about “PEAK” luxury real estate

Glad to see @GiveBackHomes address Luxury Connect, and wonder if the content went beyond cause marketing to raise uncomfortable questions about housing justice and socially-responsible real estate development? Is socially-responsible LUXURY real estate an oxymoron? Why ask? As Luxury Connects meets, NPR Is interviewing the author of The Geography of Risk, and the urgency of moral questions is hard to ignore:

1. Is building $3 trillion dollars of real estate along shorelines (the Atlantic & Gulf coast alone) threatened by climate change prudent, fair to taxpayers who pick up the cost after devastating storms?

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

2. Do luxury towers that function as safety deposit boxes for the global elite, aka “Swanktuaries” distort affordability, create zombie neighborhoods and displace ordinary people from cities that are becoming childless?

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

Alternatively, did @GiveBackHomes’s address appeal to the audience’s sense of noblesse oblige like prior generations, inspiring some in the luxury real estate community — developers, owners as well as brokers, to share their wealth, expand the economic pie or seed sustainable change, for example by partnering with nonprofits like @NewStoryCharity or other transformative innovators?

Whether they become targets for luxury / mansion / wealth taxes or become as unfashionable as wearing mink coats, don’t think this columnist is alone when he says you don’t need to be a wealth-hating advocate of the Green New Deal to cheer Manhattan’s property price “bloodbath”:

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

As tax write-offs are capped, foreign buyers retreat, unsold inventories grow, pipelines pause and million-dollar markdowns spread as McMansions sit on the market over a year, is anyone admitting we’ve seen “PEAK luxury real estate” (at least for a while)?  Or worse, does the stagnant luxury housing market foreshadow a broader real estate tipping point or recession?

Finally, is anyone asking, as Millard Fuller founder of Habitat for Humanity might, what will happen to luxury real estate if the next president builds housing policies based on a “theology of enough?”

What’s the responsible thing to do, for the climate, for a more just distribution of wealth, and for future generations?

+  +  +

Footnote: There really is an online course in socially-responsible real estate development and its remarkably affordable, just $99 per course, two-course module:

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

Posted in Uncategorized

FLASHBACK: Bidding wars plunge in Boston, #BiddingWarBacklash next?

Despite 24 years of experience, the first eight months of 2019 have been the worst ever for the Real Estate Cafe, the first online / offline, cybercafe for real estate when we opened in 1995. Now, two headlines this week make us glad that we’ve encouraged buyers client to practice #DefensiveHomebuying even it has reduced our cash flow significantly.

1. Comments by Nobel-prize winning, Yale housing economist Robert Shiller are being reported in different ways by sources inside and outside the real estate industry, but the gist is that housing prices are not just softening, he would not be surprised if they begin falling. As former clients report, it’s already a buyers market in some Boston suburbs:

2. Despite the lowest interest rates in three years, bidding wars in Boston have plunged 75% in Boston based on offers submitted by Redfin’s buyer agents who reported multiple bids in only 15% of their offers by during August 2019 versus the previous year.

As real estate consumer advocates / buyer agents, we’re cheering as it appears local housing markets have hit a tipping point and we invite homebuyers to use the hashtag #RETippingPoint on Twitter and other social media to share local examples of price reductions, negotiated savings, etc.

During the housing downturn in 2005, citizen journalists we seeing signs of a changing housing market before professional journalists. Some of us have done deep research on BLIND bidding wars and called on regulators to implement emergency transparency measures to protect buyers from overpaying.

 

CALL TO ACTION:

Scan of study this overview of bidding wars, then text 617-661-4046 and let’s meet offline if you’d like to talk about how to protect yourself as a potential homebuyer or take action if you feel you were manipulated into overpaying last year (or given bad advice by a “fake buyer agents.)

Share the embedded document above on social media using this link. Should we crowdfund an update or want a Bidding War Scorecard before you submit an offer this Fall or next year?

http://bit.ly/BidWarBacklash_Aug2016

Posted in Uncategorized

“Coming Soon” …another class action lawsuit against the real estate industry?


RETeams_SmokingGun

An award-winning real estate law attorney recently offered a definition of “Agency” in the Word of the Day series he writes for real estate agents:

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

Given his audience, no surprise his description asserted that there are times the homebuyer or seller may be required to pay the agent damages.   That one-sided perspective begged some questions:

1.  What about the opposite, for example, the agent’s failure to properly develop and implement a marketing campaign results in missing seasonal pricing premiums?

2. Or worse, the agent talks the seller into underpricing their home to generate a bidding war and none materializes?

3. And perhaps most importantly for the future of the real estate ecosystem, have there been any legal challenges yet to the growing practice of “Off-market as a Strategy?”

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


Six years ago last week, the California Association of Realtors (CAR) warned members that the growing popularity of pocket listings and related practices — Coming Soon, Pre-MLS, private inventory, office exclusives, and in-house dashboards, put the industry at risk of another class-action lawsuit for breach of fiduciary duties:


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


When asked, “Who wins, who loses, and who gets sued when agents play hide and go seek with inventory?” the agency law expert and Facebook group of leading agents responded with silence.  That’s why it’s important to redirect those questions to the public, policymakers, and given the magnitude of in-house bidding wars, the affordable housing community, too.
There is no question that agents, particularly mega-brokers, are hiding listings.  What are the costs and opportunity costs to individual homebuyers and sellers, and indirect costs to society?  What are the implications for small businesses, not just buyer agents who cannot access pocket listings; but small, independent local real estate brokerages, once the foundation of the industry?In recent years, mega-brokers have ramped up a multi-billion dollar arms race to dominate the real estate market, and their fiduciary duties to investors are taking precedence over fiduciary duties to their clients.  Here’s what Mike Delprete, an industry analyst, writes about Compass, a start-up that has raised $1.1 billion and grown by buying market share:

For Compass to become a consumer destination, it needs eyeballs. The most effective strategy — and likely the only possible strategy given the market dominance of Zillow — is to build consumer traffic with the draw of exclusive listings (emphasis added). It’s a similar strategy to Netflix and Amazon’s exclusive video content. If the Compass web portal advertises houses for sale that aren’t available anywhere else, it draws consumers to the platform.

The secret to building audience with exclusive content is scale: Compass needs significant market share for this strategy to work. Pocket listings, which are withheld from the MLS for a period of time, have been around for years, but never employed at this scale. Compass needs to advertise so much exclusive content, including coming soon listings, that consumers can’t afford to miss it.

The evidence that Compass is strongly promoting exclusive content is plainly visible on its web site. In fact, exclusive content is the primary call-to-action on Compass’ web site, starting with top billing on its site navigation.

 MikeDelprete_CompassExclusives
Compass is encouraging agents and consumers to list properties as Coming Soon as an effective pre-sales tool. This agent team page touts specific benefits, such as fewer days on market and more visitors at the first open home, while this agent teamhighlights the benefits of increased exposure and pre-listing feedback.
From “bad word” to click bait


When Real Estate Cafe blogged about this problem five years ago, our headline read “Pocket Listings: Smoking gun outs conflict of interest in real estate,” and began with a rant by a leading broker / owner who put pocket listings at the top of her list of 25 Ways Real Estate is Broken:
When I grew up in the industry, pocket listing was a bad word; now Zillow has a category for pocket listings called ‘Coming Soon.’”
 
http://bit.ly/SmokingRE  (share via social media)
Ironically, her regional brokerage now maintains a closed Facebook group for Coming Soon listings.  Is it to compete with Compass and other mega-brokers for market dominance, and simply to double-end commissions to maximize profits?  Either way,  insider trading has been normalized as the starting place for leads on both sides of the real estate transaction, undermining the MLS and the ability of consumers to access inventory in a single database.  Somehow agents teams inside Compass and other brokerages also turn a blind eye to obvious conflicts of interest and how they harm their clients.  As the Consumer Federation of America wrote in six months ago, it’s an Agency Mess — and a time bomb.


Class action lawsuits are unfolding, and regulators at the FTC / DOJ are watching anti-competitive practices following their investigation of the real estate industry and call for public comment last year.  What’s yours?


http://bit.ly/reMarathon_1Q2019  (share via social media)
Posted in Bidding wars, Buyer agent, Commission Reform, Consumer protection, Defensive Homebuying, Designated Agency, Dual Agency Detective, Pocket Listings, Real Estate Consumer Bill of Rights, RECALL: Real Estate Consumer Alliance, Unbundling the Commission

Using graduation & reunion season to reform real estate, #Hack4REGood

Commencement season brings families and friends together to focus on the future, so when a fellow real estate innovator suggested squeezing in an interview before she leaves town suggested we address three megatrends and a call to action:

Megatrends

1.  After a marathon like effort, real estate consumer advocates have just run their best quarter ever.  That means progress on long-overdue reforms and BILLIONS annually in consumer savings:

http://bit.ly/reMarathon_1Q2019 (share URL on social media)

2.  The battle for the soul of the real estate ecosystem goes beyond fees to rethinking zoning / housing, addressing affordability, and reconnecting neighbors

http://bit.ly/Battle4RESoul (share URL on social media)

3.  Addressing affordable housing means talking about how we share space, see PopUp CoLiving Room at a recent BlockpARTy

http://bit.ly/NextCoLynningRoom_PREVIEW (share URL on social media)

Turning class action into class gifts

Left to itself, the real estate industry is not going to pursue overdue reforms; and left to venture capitalists who want to maximize ROI, startups are not going to deliver $30 BILLION annually in consumer savings.  How do we get there?  Real estate consumer advocates need to mobilize a series of events to raise consumer awareness, starting with the Consumer Assembly next week in Washington, DC.  We need to engage Millennials, the current generation of real estate consumers who have a shockingly high rate of buyers remorse — 60-70%.  We have a moral obligation to do better than that, in the language of the Innovation community, we need to hack real estate.  Hack commissions, hack conflicts of interest, hack obsolete zoning — #Hack4REGood.

Is that meaningless rhetoric or a call for action?  Let the past quarter speak for itself — three class action lawsuits, one for conflicts of interest and two for price fixing commissions.  We’d like to challenge new graduates and reunions classes to help real estate consumer advocates / #RE2020 fix the industry by initiating their own class actions — not a lawsuits but campaigns to save money on real estate transactions and donate a portion of those savings to class gifts to their alma maters.

Real Estate Cafe has developed one way to do that, but the stakes are so high we’d like to invite others to participate in an idea competition to #Hack4REGood.  The first step is to encourage their schools to sever ties with existing megabrokers who pose as innovators but routinely engage in conflicts of interest and whose parent corporations are named in class action lawsuits.

Build wealth by multiplying family downpayment gifts

We recognize that tuition burdens are unprecedented and like to offer families who feel overwhelmed by student debt a gift of hope.  Since 1995, Real Estate Cafe has given homebuyers over $1 million in commission rebates.  Two families, one from Harvard and the other MIT, have received over $200,000 in rebates over multiple transactions.  Sounds like sorcery, but it’s just rewarding smart clients for their self-reliance (or superpowers as portrayed in MIT’s most recent hack in the link below).

http://bit.ly/SorceryREbates (share URL on social media)

Family downpayment gifts are not uncommon, so we’d like to explore ways to reward parents and grandparents by multiplying their generosity.  Want to help us #Hack4REGood?  Read the article above and text #REGiftMultiplier to 617-661-4046 before you leave town.

Posted in Affordable housing, Buyer agent, commission rebate, Idea Bar, Mlllennials, RE2020, Real estate rebates, RECALL: Real Estate Consumer Alliance, Savings & Rebates, Unbundling the Commission

Real estate consumer advocates run Best Quarter ever in $30B Savings / Reform Marathon

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Two weeks before race day, began thinking of the Boston Marathon as a metaphor for another marathon with a historic starting line in Boston. Those who have run any distance know the preparation, persistence and pacing it takes to finish the grueling 26.2 mile course. Runners build their stamina over years, and sometimes include quarter-mile speed work in their workouts so they have kick left to finish strong — like this Boston Marathon men’s winner. That’s also the case for fellow real estate consumer advocates who turned in their best performance ever during the first three months of this year, 1Q2019.

Twenty-six years and two weeks ago, a group of real estate consumer advocates gathered in Boston for an event that we did not know would become a marathon. The original Consumer Revolution in Real Estate was pre-internet; and over next two days, we discussed addressed anti-competitive practices in the industry that extend into today’s headlines. Keynote addresses were delivered by two leading consumer advocates, Ralph Nader and Steve Brobeck, recently retired head of the Consumer Federation of America.

A week ago, 150 innovators and real estate insiders gathered in Palm Springs to discuss where the industry would be in five years. Wonder how many of their conversations reflected our belief that 1Q2019 was the best quarter ever for real estate consumer advocates and the homebuyers / sellers we serve! Here are 10 bullet points to substantiate that claim:

1. The quarter began with a warning that the class action lawsuit against designated agents in New York could have serious implications to the industry;
Join / share working group?
http://bit.ly/DesignatedClassActionNY_1Q2019

2. After a decade of being on the sidelines, Steve Brobeck of the Consumer Federation of America followed up his presentation at the FTC / DOJ’s 2018 hearing on barriers to innovation in real estate with The Agency Mess, a report on fiduciary duties in real estate. At one point, it had generated major stories inside and outside the industry:
Join / share working group?
http://bit.ly/DeconstructAgencyMess_1Q2019

3. Sensing an opportunity to take action to address the mess, the Minnesota Association of Realtors tried to introduce corrective legislation. The attempt to package designated agency as the cure for dual agency was thwarted by real estate consumer advocates led by Doug Miller of http://CAARE.org, and the legislation was defeated in committee.
Join / share working group?
http://bit.ly/DefeatedDesignatedMN_1Q2019

4. The Wall Street Journal exposed another Facebook privacy scandal, this time involving the unauthorized transfer of personal data from Realtor.com to Facebook. The front page story allowed real estate consumer advocates to build a bridge to privacy advocates and a broader discussion of surveillance capitalism.
Join / share working group?
http://bit.ly/ExposeREPrivacyPREV

5. National Consumer Protection Week ended with the announcement of a massive class action lawsuit against the National Association of Realtors and four giant real estate brokerages / franchisors for price fixing. The suit involves transactions over five years (confirm) across 21 states, totally an estimated $58 Billion in damages.
Join / share working group?
http://bit.ly/ClassREactLoomio

6. While some industry pundits predict that iBuyers could account for 40-60% of real estate transactions within a matter of years, real estate consumer advocates in Massachusetts have been invited the Mass Board of Real Estate to discuss regulatory issues raised by iBuyers. Meanwhile these billion dollar shapeshifters are using listing presentations to make CASH offers before properties are listed in the MLS.
Join / share working group?
http://bit.ly/iBuyersMABoardRE_1Q2019

7. Concerned about fair housing issues and just pricing, City councilors in New York has proposed legislation to regulate excessive real estate fees, deposits and commissions in the apartment market in NYC.
Join / share working group?
http://bit.ly/CapHighREFeesNY_1Q2019

8. Leading real estate brand consultants are writing about the industry’s day of reckoning, but there’s mention of the consumer victories above! Instead, they’re warning that iBuyers will “drive the industry into an intense Darwinian era” where only the fittest will survive.
Join / share working group?
http://bit.ly/wREckoning1Q2019

9. Last year, the invitation-only group of elite real estate executives and innovators that retreated into the desert to Disconnect, published the Parker Principles — 10 steps to make the industry more consumer-centric. It’s not clear how that work product was reflected in this year’s event, but it appears that the event was focused on helping agents survive rather than helping real estate consumers save BILLIONS in coming years.
Join / share working group?
http://bit.ly/DeconstructDisconnect_1Q2019

10. In contrast, when real estate consumer advocates asked in 2015 what would the real estate ecosystem would look like in five years, we launched RE2020 — an open, collaboration platformed dedicated to cocreating a money-saving real estate ecosystem capable of delivering $30 billion annually in consumer savings by the year 2020. The long-overdue reforms above will help us reach that goal.
Join / share working groups?
http://RE2020.Loomio.org

The progress above does not include advances made by the affordable housing advocates, including calls to tax luxury real estate transactions to address affordable housing and climate change; calls to revive rent control, and tenant protections — including legal assistance to low-income tenants facing eviction.
Join / share working group?
http://bit.ly/REJusticeTAX

Instead of inviting industry elites to retreat into the desert, RE2020 invites real estate consumers and fellow innovators to move into the future. Our approach is to invite multiple stakeholders, not industry insiders, to address systemic problems that impact all of us and cocreate a money-saving real estate ecosystem that serves us all. Want to join us, or know anyone who should? Here’s a good place to start if you want to use Holy Week / Passover to catch-up with other marathon runners and see how far we’ve come.

Join / share working group?
http://bit.ly/BosRETechTable_PostICNY19

UPDATE:

As strong as 1Q2019 was, 2Q2019 is also off to an impressive start. Locally, a hearing by the Mass. Board of Real Estate just discussed real estate teams acting as if there are independent real estate brokerages. We’ve asked them to address the conflicts of interest within conflicts of interest that exist in the teams, for example at Compass, in a future meeting.

Nationally, a second major class action lawsuit is targeting real estate commissions. What are implications for both suits? Industry observers are saying “… winners would be brokers “who are willing to innovate.” RE2020’s take is that it will be real estate consumers, homebuyers and sellers, who will save BILLIONS annually. It’s taken a marathon-like effort to reach that goal, but the finish line is in sight.

Posted in Best of Breed, Commission Reform, Consumer protection, Designated Agency, Disrupt Real Estate, RE2020, Real Estate Consumer Bill of Rights, Real Estate Roundtables, RECALL: Real Estate Consumer Alliance, Savings & Rebates, Unbundling the Commission

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
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