Reflections on the Zillow/Trulia Merger by a Seasoned Realtor

Introduction

To the seasoned, well-affiliated Realtor with hundreds of clients in her pipeline, the Trulia/Zillow merger is just another business move being made between publicly traded companies; it is an incidental headline on the homepage of Yahoo! Finance while sipping one’s morning coffee.

Successful Realtors move with the currents and stay afloat in rapidly changing times like these; they possess timeless and fundamental skills in customer service, follow up, and local expertise that keep them constantly in the mind’s eye of their client base.

Heraclitus of Ephesus remarked that one cannot step in the same river twice. So too do we find the real estate industry constantly changing, demanding vigilance and adjustment when needed. Even veteran Realtors need to adjust to the changes; no one is immune to the ever-changing frontier.

However, for the newer Realtors of the industry, the merger could mean something different. Newer Realtors need to organize their schedule and decide on paying or not paying for advertising commitments. It is critical that they execute the best choices in filling their pipeline with quality deals; newer Realtors need to buckle down and carefully survey this new, technological landscape and pick out what works for them.

Several weeks have passed since the Zillow/Trulia merger and the business move has set the internet ablaze with speculation over the consequences of the two largest real estate websites coming together.

In this article, we look at the possible consequences of the merger in relation to the real estate market and discuss what new agents can do to make sound choices in advertising. We conclude by discussing Zillow/Trulia’s business model to determine whether Realtors are still in control of their marketing efforts. We find that they are.

The Main Concern

Let us start with the main concern: Some say the merger could result in anti-trust violations. This may include “per se” illegalities such as price-fixing between Zillow and Trulia that could increase the cost of advertising to the Realtor. Some argue that the increased cost will be passed on to the consumers and will create an undue burden on the consumer.

Responses to the Main Concern

In response to this concern, it is very possible that advertising prices could rise as a consequence of the merger, but price-fixing may not be involved because Zillow and Trulia continue to remain as separate companies, but Trulia now reports to Zillow on a regular basis to come up with new strategies. The difference in the benefits they can offer Realtors will vary their pricing, so price-fixing is possible, but unlikely.

While their intra-company intelligence has improved and overhead lowered, the responsibilities of choosing which real estate advertising to go with as part of one’s marketing mix largely remain unchanged. In other words, we need to value the Realtor’s autonomy here. The Realtor still calls the shots of how much advertising budget should be spent yearly.

If the merger causes advertising costs to increase but yields enough new business to turn a profit after expenses and paves the road for repeat business, then it is clear that the Realtor is voluntarily consenting to the increased advertising costs because it is valuable. If at any time the advertising is not working, the subscription can be canceled and the costs can either be refunded if the Realtor is persuasive enough or the sunk costs can be absorbed and become tax deductible. “Nothing ventured, nothing gained”, as some might say.

The second response to this concern is that these costs will be passed on the consumer, however I find this to be unlikely. Repeat business is rewarded to the tireless, professional, and ethical efforts of the Realtor who helps to achieve her client’s goals. Any ethical Realtor will not pass her advertising costs to the client because it does not create a good environment for repeat business.

While some Realtors may provide additional services separately for a separate fee, such as staging or cleaning, those fees are justified and transparent. By taking advertising costs and masking it as another fee, the Realtor puts herself in red flag territory. What is this extra fee on the final HUD and Good Faith Estimate and won’t the lender and escrow have something to say about it? I’m not even sure how Realtors can pitch the fee to a client: “Oh by the way, Trulia helped me find you but it cost me more money. Do you think you can pay it? Or how about we go halfsies on it?” How unreal!

It is possible that the client will often place her trust in the Realtor and overlook the fee, but if the additional advertising fee is questioned by the client and the Realtor cannot give an adequate answer, the bond of trust between fiduciary and principal can be undone rather quickly.

Is the Advertising Fee Overpriced?

So are Realtors getting squeezed by real estate online advertisers trying to make a quick buck? I think it is OK to have a healthy skepticism about the merger, and their advertising solutions sold at a premium may not be the shoe that fits all, but we cannot avoid the fact that site traffic for these sites accounts for about 48% of all site traffic for real estate searches on the web.[1] That kind of site of traffic is valuable and Realtors can pay for value that yields them more business.

We are sometimes tempted to take a commission check and subtract away the advertising costs required to procure that commission. If we do that, then clearly the merger has decreased the net income of the Realtor. But there is more to the analysis than that. The advertising can also provide repeat business and word of mouth that will get more business into your pipeline. If we consider these sources of business, the advertising becomes more and more attractive.

Before we move on, let me say this: I am not defending price increases of Zillow/Trulia, but I do believe they have a valuable product that Realtors can use. Some Realtors pay for advertising online, only to have the company tell them proudly that 300 (un)qualified visitors looked at their profile, but not a single one sent an email or a phone call. When something does not work or will not have long-term payout, it is time to get out. But if something works, it is time to milk it. There is some internet gossip out there that Zillow/Trulia is more promising than the rest. But don’t listen to me; look around and see for yourself.

What Should New Realtors Do?

New Realtors need to make a decision about whether to purchase advertising from Zillow/Trulia or not, even if it will be at a premium. When just starting out, a new agent has 6 months of reserves in her bank account to pay for business and living expenses. Every penny counts. Performing an all-out advertising campaign on Zillow/Trulia could be costly, but it could be the push one needs to become the go-to agent of that particular service area. New Realtors need to check their Zillow/Trulia leads regularly, see how many people check their profiles, and see what outputs were procured as a direct result from the advertising.

I think new Realtors need to be well-versed in projecting future earnings. It could be the case that no commissions will come during months 0-4, but maybe there will be a great payday in month 5 that will make online advertising worth it. In those first few months of uncertainty, experimentation is a must. New Realtors need to handle and cope with the pressure of being in the red for a few months, focusing keenly on the light of the end of the tunnel that will reward their efforts.

Going Low Tech; Returning to the Fundamentals

For those who will not dabble in Zillow/Trulia’s methods to capture potential homebuyers, and for those who want their 6 months of reserves to be stretched even further, there is no shame in going low-tech and hi-touch. “Walking the farm”, or passing out fliers and knocking on doors in one’s service area could be valuable as part of the marketing mix, with free sunshine and exercise included with every outing. Those belonging to church groups or volunteer groups can flourish by helping friends who want to buy and sell in real estate.

Who Gave Zillow/Trulia Our Listings? We Did

When reviewing Zillow/Trulia’s merger and its consequences, we recall the not-so-discussed origin of the success of their business model: us. At the bottom of every MLS input sheet, we place checks in boxes that ask us if we want the full address of our listing to appear on the internet.

To many Realtors, it is a no-brainer to check all these boxes because we care about the listing getting maximum exposure on all media platforms—including the internet. Excluding the listing from Zillow/Trulia calls into question whether we are servicing the listing properly and acting in the best interests of our client (the same argument is used for pocket listings). In short, we are indebted to these websites for giving Realtors more outlets to market the listing, and these websites are indebted to us for feeding them listings which gives them exceptional site traffic.

Conclusion: Everybody Wins and We are Still in Control

Our client’s desire to receive maximum exposure on the listing to get the maximum sale price and Zillow/Trulia’s promise to “empower consumers with information and tools to make smart decisions about homes, real estate and mortgages”[2] are consistent with one another. The two work hand in hand and Realtors can take advantage of this technological frontier without sacrificing their duties as a Realtor. Our relationship with Zillow/Trulia is not parasitic, but symbiotic. And even after the dust has settled after the merger, we Realtors are still in full control and in the driver’s seat of our marketing efforts, whether they are offline or online, or both. We are still in control of the marketing mix in a world where Zillow and Trulia have merged.

[1] time.com/money/3047329/zillow-trulia-merger-consumers. Accessed August 16 2014.

[2] http://www.zillow.com/corp/About.htm Accessed August 15 2014.

California Drought and a Better Garden for Americans

(source: www.jchfirm.com)

It is great to learn that Home Owner Associations will not change Californians for not watering their lawn. Have you heard the latest rulings? They were in conflict with each other, but now they are resolved. The first ruling was that Governor Brown passed into law a fine for $500/day if somebody overwatered their lawn.

(source: cadreamnetwork.org)

It’s not clear how much water that is, but one clear idea is to make aware those absentminded homeowners who will turn on the sprinklers and completely forget about them. We’ve all seen it from time to time– the sidewalks get just as much water as the grass. The water drains into the gutter in the street and we can hear it cascading down there, right next to the little stamp that says “Don’t Dump in Our Bay.”
So while many lawns are becoming brown, many HOAs began charging homeowners for not keeping up with the watering of their lawn. That was precisely the tension the new laws are trying to address: that HOAs cannot charge homeowners fees for not watering their lawn.

(source: article.wn.com)

The priority of conserving water exceeds that of keeping the neighborhood beautiful. In other words, the utilitarian consideration of water conservation trumps the aesthetic needs of the community.

(source: decodedpast.com)

One can make the case that watering lawns are important for property values, but you can only make that case if you put the home values outside the context of the drought. The drought comes first and everything else comes second.

(Source: spraysite.net)

Emerging now are many companies that will offer to spray your lawn with green paint to make it look like your lawn is green. The effect is temporary, lasting anywhere from a few weeks to half a year. Is this a good product?

 

I think it is a good product, only to accomplish very specific goals. The first is that people use it to sell a house and to give it more appeal. The lawn will be greened only so far as to increase the curb appeal of the property. It should be fully disclosed to the buyer that the lawn was painted, much in the same way it is disclosed that the furniture and window treatments for staging will not stay. If the buyer consents to it, then you have a happy seller and a happy buyer.

That’s one way to use it. The other way to use it is for agents who need a lawn to look green to avoid being flagged by cities or HOAs. Now that HOAs cannot charge a fee for it, this use will probably go down, but there’s no telling if a city can fine an owner of land and say it is a fire hazard if the grass is too dry. My opinion is that the city will not do this.

Honestly, I don’t think the media has caught on to the other possibility that our lawns are not water-friendly to begin with. Nobody really disputes it because part of the idealized form of houses is the white picket fence and the lush, green lawn. Nobody thinks of low-water consuming geraniums and red wood chips when they think of the perfect house.

 

In other for us to truly survive this drought, we need to divorce the demand for green lawns away from the ideal form of the perfect house. When we do that, we can see truly that grassy lawns are too high maintenance for an area that is low on its water supplies.

 

I was reading a feature story that commented on how persons who live in Australia are constantly in a season of drought and that they probably do not have grassy lawns. Instead, they have low maintenance gardens and rain collecting barrels that collect rainwater from their gutters. That water is later used to water plants.

(source: www.pondsonline.ca)

I know Alameda County used to give rebates to homeowners who design their front and back yards to consume less water, so the message has been put out there. While the rebate can be offered again, I think the greatest motivator for people to get rid of their lawns is to bring to people’s attention the ecological drawbacks that it possesses and to urge people to have gardens that guzzle far less water.

(source: www.califliving.com)

Spicing Up Your Real Estate Website IDX to Get New Clients

Real estate marketing technologies are constantly evolving and real estate agents need to evolve with it. One such technology is called IDX, or Internet Data Exchange, that lets the public view properties online by accessing websites that pay for access to the Multiple Listing Service (MLS).[1] I will first describe its use in major real estate companies, discuss the challenges created by this environment, and then offer suggestions to maximize IDX use in your own website in order to dominate your local market.

Redfin, Trulia, and Zillow are some of the familiar websites that use IDX. These sites obtain property information directly from the MLS. This information is fed into their websites, often in real time. Millions of visitors come to their sites each day. These companies will often sell advertising to agents via zip codes, sell leads to agents, and have in-house agents to help visitors.

IDX makes buyers and sellers savvier with price and neighborhood data than ever before. While some might perceive this as more challenging, I find it to be easier. When property information is available in multiple platforms, you do not need to spend a long time convincing them of today’s market prices—the information is already out there. With information becoming more transparent, the consumer can make more informed decisions.

IDX’s impact to the consumer is largely positive. The consumer’s increased access to property listings does not pose any significant challenges to real estate agents. Instead, the main challenge is this: When larger real estate websites receive millions of views, they end up at the top of the search engine results. Meanwhile, your agent website that possesses the same IDX technology gets pushed further down, becoming less and less relevant in the eyes of the search engine and consumer.

For example, if a buyer searches for 123 Main Street, chances are they will find it on Redfin, Trulia, and Zillow first and not your website. While Redfin has the same property information as you do, Redfin’s higher page ranking lets it be seen well before yours. The task now is to try and capture some of this very lucrative site traffic for your own.

Two choices emerge: the first is to pay to be advertised by these larger real estate websites. They are admittedly successful companies with millions of daily visitors and your website is likely not to compare. Subscribing to their monthly advertising programs may help you get more business. The second option is to improve the IDX on your own personal website to try and improve visitor site traffic. This article explores the second option: “spicing up” your IDX.

You can “spice up” your IDX by featuring information about the property that nobody else has. By featuring information about the property that the MLS does not have but is not confidential, you can provide specialized, local knowledge that big real estate websites may not have.

For example, you can feature properties specifically in your local farm/local service area. Perhaps these properties just came out on the market or these properties recently underwent price changes. You can give your opinion on property photos (tip: keep it positive), look up and discuss walking scores, proximity to schools and freeways, and even point out local restaurants that are nearby.

Highlight any feature that adds something positive to the property while not revealing anything confidential is fair game (and check with your local MLS board what is allowed). Pick a theme, keep it interesting, and get subscribers. Doing this for a few months can be promising and establishes your expertise.

In summary, IDX helps consumers become savvier and also gives you a chance to be original and relevant in today’s real estate market. Just remember that IDX is only one aspect of your marketing plan that should be worked on but not relied on in isolation. Successful real estate agents diversify their marketing efforts and consistently find ways to stand out from the crowd. With over a million real estate licenses nationwide,[2] you don’t just want to be one licensee out of a million—you want to be one-in-a-million.

 

[1] http://en.wikipedia.org/wiki/Internet_Data_Exchange, accessed 7/17/14

[2] http://www.realtor.org/field-guides/field-guide-to-quick-real-estate-statistics, accessed 7/17/14.

New Homes in Veneto rolling out new homes this Saturday, call 510 304 6060 for details| Dublin, California | D.R. Horton

Veneto

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Overview

Located in the rolling hills above Dublin, homebuyers at Veneto at Pasitano will enjoy panoramic views, miles of hiking trails, and nearby athletic fields. Close proximity to excellent schools, fine dining, shopping, Dublin’s business center and the I-580/I-680 interchange, make Veneto a very desirable place to live!

Two-story Built for Better Living® home designs at Veneto feature exteriors with an architectural flair including Tuscan, Italianate, Spanish Colonial and French Country styling. These elegant home designs include many of today’s most sought-after features and an array of options for customization that can make your new home at Veneto truly one of a kind.

via New Homes in Veneto | Dublin, California | D.R. Horton.

A look at Fremont Neighborhood Cabrillo’s 4 bedroom homes on the market.

Here’s some raw data from the MLS on Cabrillo’s 4 bedroom houses. What I will do is provide an interpretation of the activity in this neighborhood and  give you facts about the activity in this neighborhood. The data is active pending and sold from 1/1/14 to 7/14/14.

StatusDOMAddressSqFtBRBthList PriceSold Price
ACTV1435422 ARDO CT138742$725,000
ACTV2836152 Perkins Street264343$829,000
NEW64073 Becerra Dr147642$699,000
NEW34397 Nicolet Ave233643$849,950
PEND164537 ANGELES AVE140042$699,888
PEND1436259 Gibraltar Court216043$838,888
PSB3335284 AQUADO CT168743$750,000
SLD144667 Portola Drive42$579,000$624,000
SLD6335631 cabral196042$579,000$590,000
SLD164304 DALI ST138742$585,000$647,000
SLD835299 AQUADO COURT138742$650,000$715,000
SLD154221 VINCENTE ST138742$650,000$632,500
SLD3336150 SAN PEDRO DR163743$659,500$640,000
SLD336851 DAUPHINE AVE168442$688,500$700,000
SLD214305 NICOLET AVE187742$728,888$740,000
SLD74167 VINCENTE ST161142$729,888$850,000
SLD94149 Nicolet179742$734,950$810,000
SLD936239 Gibraltar Ct.251243$758,888$812,000
SLD484434 GIBRALTAR DR170442$759,950$750,000
SLD1236113 ELBA PL251153$779,750$780,000
SLD1135122 ADRIANO ST176543$790,000$795,500

On average it takes about 21 days on market (DOM) for a property to become pending. There’s no insight on how many offers a property received until becoming pending, but if the price was over asking price, it is likely that multiple offers were received.

The average list price in this area is about $690,951 or $401.75/sqft. The average sale price is $720,428 or $418.69. The gap between list price and sale price tells us that over asking purchases are common and justified throughout the sold data.

People like this neighborhood because of the good schools and proximity to shops. With gas, grocery, and freeway nearby, it’s very easy to get your amenities. If you exit Cabrillo and want to commute along the Dumbarton Bridge, Decoto Rd (where our office is) will feed you into the bridge so you can commute to the peninsula without much effort. It’s really the heart of north Fremont I would say. Many buyers and sellers tell me they like living there.

Cute San Leandro Starter Home for sale $422,000 in Assumption Parish Neighborhood

Contact info:
Dean Paul Dominguez | Re/Max Active Realty | 510-304-6060

HUD Home For Sale in San Leandro– Assumption Parish

623 Valita Dr, San Leandro, CA 94577

$422,000

KEY FEATURES
Year Built: 1946
Sq Footage: 1169 sqft.
Bedrooms: 2 Beds
Bathrooms: 1 Bath
Floors: 1
Parking: 2 Garage
Laundry: In Unit
Lot Size: 5150 Square Feet
Property Type: Single Family House

DESCRIPTION


Great starter HUD home moving in condition in Assumption Parish Neighborhood. Property location is partially in a cul-de-sac. Bike/walking Mc Kinley Elementary school; San Leandro High School; San Leandro Fred T. Korematsu Campus, shopping, worship temples & daycares.

BRE Bro #01778824

Equal Housing Opportunity

hudhomestore.com

PROPERTY FEATURES


  • Master bath
  • Fenced yard
  • Lawn

COMMUNITY FEATURES


  • Garage – Attached

ADDITIONAL LINKS


  • Website: http://www.belinadominguez.com

Contact info:
Dean Paul Dominguez
Re/Max Active Realty
510-304-6060