People and Properties

What Jimmy Buffett Taught me about Marketing

2009-08-10T08:47:00.001-07:00

Saturday night I went to summer school, not your typical summer school, but summer school as in Jimmy Buffett's 2009 summer concert SummerZcool.
Never in my wildest imagination did I think I would leave that event with a better understanding of marketing. That assumption couldn't be further from the truth. Buffett has an amazing ability to connect with his audience. Most of 30 or 40 thousand parrotheads have as much in common with Jimmy and his Coral Reefers as I do with the man on the moon. However Buffett connected with everybody. How did he do this....He Kept it Local.
Every imaginable reference to Chicago was made. He talked and sang about Bars on Belmont Street, Hamburgers at the Billygoat, Surfing Lake Michigan, Tourists from Iowa, Hookers from South Cicero and had people on the Southside of Chicago singing Go Cubs Go.
Much has been said about being the local expert. Buffett has been the king of local for his entire career. I have seen him in numerous places at various points in his career and each time he made me think the city and venue he is playing is special. It is this ability to connect that keeps this 62 year old, who has only had a handful of radio hits one of the highest grossing concerts year in and out.
Local appeal and local information is the key to keeping and attracting loyal parrotheads. Weather its real estate, or entertainment, people also want to feel the connection.

One Bourbon, One Scotch, & One Beer...And A First Time Home Buyer

2009-07-22T01:51:00.000-07:00

Just as I was thinking, I haven’t written a Blog in a while, my trusty Blackberry gives me the familiar chirp of a text message. Much too my surprise it is a message from a friend….”Can I buy you a drink or several tomorrow night or the next”. Heck we are in the midst of a recession and I have a friend offering to buy me a drink or, as he put it several, George Thorogood quickly comes to mind. I quick reply yep what’s up?
Then to my horror I get “I am buying a house”. My first thought is it must be a FSBO or he must be buying it from a bank. I text back, “Is it a FSBO”. The response, “Nope it is listed by Agent X, with Company X and I told her I am not using an agent”. My one word reply “Stop”.
My buddy, a single, intelligent, and wealthy commodities trader at the Chicago Board goes on to explain to me that he told the agent this is his first home purchase. It is beyond my comprehension that the listing agent would not have suggested some sort of representation for the buyer. In today’s litigious environment this seems to very perilous behavior.
I can only imagine that this listing agent is seeing the sugar plumb ferries of a double bubble dancing in her/his head. An extra 15-20K in my pocket…A long Labor Day Weekend in the Caribbean.
Regardless of whether or not my buddy listens to my advice to get representation over one bourbon, one scotch and one beer tomorrow night, I am confident the sugar plumb ferries will quickly stop dancing as I will arm him with the information he needs to make intelligent decisions.
Once again I am amazed how reasonably intelligent people make very unintelligent decisions when it comes to real estate.
The first bad decision is the error of omission by the agent for not explaining the importance of representation. The second bad decision is the fact that my buddy is willing to make the biggest purchase of his life with Basil Hayden, Johnny Walker, and Augustus Busch as his representative. The third was when I believed my friend when he told me he decided he wasn’t going to buy for at least another year, and I quit helping him look.
At least now I have plans for tomorrow night…”give me a triple shot of that juice”.

Yo Dude......Are You A Stalker or Just Kinda Creepy!

2009-06-24T21:46:00.000-07:00

The other day a buddy of mine sent me one of the best blog posts in the history real estate blogging http://www.1000wattconsulting.com/blog/2008/01/i-am-not-a-lead.html . In my opinion it sums up the Realtor/Client relationship in the web 2.0 environment we are now living in now, and quite frankly leaving quickly.
It wasn't long ago that we thought our fancy auto responders and drip campaigns where the silver bullet of customer acquisition (Guilty as charged your Honor). Auto responders, drip campaigns, pictures of our dogs, and an alphabet soup of letters that would make a scrabble champion cry, yea that is what will give me creditability as a professional.
John Q. Public takes a look at the stranger who is sending him/her pictures of their dog, with a strange string of letters behind their name is, and finds a glamour head shot straight out of 1950's Hollywood, or worse yet in my neck of the woods a 1920’s Chicago Gangster pose.
Guess what, John Q. Public doesn't care. In fact it is kind of creepy. I get an email from somebody I don't know, telling me what I might want to buy. Get lost!
This leads me to the crux of my hypothesis. Doesn't permission based interactive marketing make more sense? I recently became aware of, and started using a software program called Rezora (www.rezora.com). Rezora gives agents and consumers/clients the ability to really establish a relationship. It is not a guessing game. It is not John Q. Public is on my automated home update list so he is a client. Rezora allows us to quit guessing. Rezora certainly isn't a new silver bullet, but I think it is part of the future.
The traditional thinking of Brokerage is Broke. This is evident by the financial troubles most companies find themselves in today. Print advertising is dead, try to advertise in the Rocky Mountain News (http://www.rockymountainnews.com/), social networking went from a college fad, to 30 million users and growing daily and revolution is in the air.
How much longer is the consumer going to accept us cyber-spying on them, how much longer is a 1" X 1" add in the news paper going to be considered marketing, how much longer are we going to put up with being kinda creepy?
Is there a new economic model on the Horizon? I look forward to your thoughts, there must be a better way.

Hey Realtor...Your Web Site May Be a Waste of Time

2009-06-17T22:42:00.000-07:00

I have recently been doing a lot of thinking about web sites.
As a Realtor and more importantly a real estate practitioner, I am starting to wonder the strategy of putting so much time, effort, and money into my web site. The facts say that I/We need to have a web presence. But why? What is the purpose of a web site? My thinking used to be to provide the consumer with information, provide the consumer with the ability to search for property, provide me with a way to capture that consumer.
The reality of the situation is there are a number of sources the consumer is going to find and visit before they find my littler corner of the Internet.
May it not be a better approach to have a web site that gives the consumer the opportunity to get to know us as first people first, secondly as agents/brokers, and third as service provides they can count on for professional service?
My new thinking was reinforced tonight as I visited this
http://www.hitwise.com/datacenter/main/dashboard-10133.html
Of the top 20 real estate sites only 6 are actually real estate companies. Two are essentially the same company (Realogy). That leaves us with 5. Meaning 75% of consumers are searching for property everywhere but real estate web sites.
It seems like once again we are behind the consumer wants and needs curve.
I don't have the answer but I look forward to your comments.

Is it all About the Split

2009-05-22T12:16:00.000-07:00

This morning I was discussing the concept of what do real estate agents really need or want from their respective companies, is it tools and systems to generate and capture leads or is it all about the commission split.
Most companies promise some sort of lead generation. The national brands talk about the consumers predisposition to go with well know brands. The smaller more boutique offices talk about their brand presence in a certain market segment. Both of these arguments suggest the agent is willing to give up a portion of the commission for these lead generation tools. On the other hand the 100% concepts argue that the business is all about the money and the company, for lack of a better term, is just a place for a licensee to practice, an incubator for the entrepreneurial spirit of an agent.
Having read a number of blogs about the pros and cons of both systems is it still feasible to have a company provide all the lead capture and generating tools and have an agent on a 50% commission split? Or would agents rather pay a monthly fee for a packaged or bundled tool box and keep 100% of the commission?
Or can some sort of Hybrid System be worked out. A kind out network an agent could join where leads provided by the network a paid out at 50% and leads generated without the network are paid at 80%-100%?
Is there a perfect balance between commission split and tools? Are there any new programs out there that merit special attention?

Disruptive Innovation

2009-05-14T15:21:00.000-07:00

I recently came across the term “Disruptive Innovation”. The term was coined by Harvard Professor Clayton Christensen, and describes a process in which a new concept, idea, product, or service takes root at the low end of a market or industry and then relentlessly moves up the preverbal food chain and displaces the market or industry establishment.
Thinking about our industry, its past, and its future, I began to realize we are now in the midst of what could be the greatest time of “Disruptive Innovation”. Looking to the past, I think the dawn of Realty Executives and Re/Max was a period of great Disruptive Innovation. No longer could a Broker/Owner count on an agent staying with a company on a 50/50 commission split. Agents became the center piece of the industry. Agents began branding themselves; the really good ones began operating their practice as a business. An entire industry grow to serve these new entrepreneurs, as a licensee you can’t go a week without some company trying to sell you the latest and greatest. The old guard fought this process tooth and nail.
The second phase of “Disruptive Innovation” came with the advent of the Corporate on stop shop. Companies like Cendant (Realogy) and Home Services began to “take back” the industry by providing the consumer a one shop stop concept. Offering mortgage, title, and insurance services these corporate giants began to attract agents offering turn key solutions to agents and convenience to the consumer.
We are now in an environment where technology and consumer demand is radically changing the one stop shop concept. This begs the question, what is the next big “Disruptive Innovation” in the Real Estate Industry. Technology is too broad an answer. My thought is the next big driver of “Disruptive Innovation” is the man or women on the street. I look at some of the recent litigation that has happened and continues to occur and wonder if the industry is, as I think is its history, fighting the “Disruptive Innovation” that the consumer is demanding. The latest controversy I came across is with Google and a Realtor in Indianapolis.
My question is simple why does the industry continue to fight change? Isn't the above mentioned realtor and for that matter Google just providing the general public what they demand?

To Sign or Not to Sign?

2009-05-01T10:09:00.000-07:00

To sign or not to sign? That seems to be the latest controversy within the Chicago Real Estate Community. Apparently the City of Chicago has had on its books an ordinance that prohibits advertising signs on public property. Public property certainly includes sidewalks and the like. As Spring approaches the City has indicated that they are going to place added emphasis on the enforcement of the ordinance.
This seems to have a number of my colleagues in a tizzy.
Although I can image that open house signs bring in some traffic I find it very hard to believe the numbers are of any significance. We all know that consumers are getting information from the internet and the “more traditional” methods of attracting buyers and sellers are becoming obsolete.
As a community, Realtors should view this as a positive. The City of Chicago has created a situation where the public is forced to find open house information from the real estate community. Wouldn’t it be nice if every buyer needed to consult with his/her Realtor in order to get open house information? I would not object to a law banning for sale signs? Providing information that clients and consumers want and need is the future of the industry. Anything that allows me to do that is a plus.
Find all the Chicago Listings @ www.jeffcastner.com.

Our Tax Dollars and NAR Dues @ Work......

2009-04-22T23:06:00.000-07:00

Just what I needed before bed….I get a tweet saying here is a list and map of TARP recipients, http://ow.ly/1YfN . Being the skeptic that I often am I do a Google search for “Firms that received TARP funds” low and behold here is the list http://www.bailout.propublica.org/main/list/index.
The numbers are staggering.
No being an economist, I start looking for who do we have to blame. A quick Google search of “who is to blame for the economic mess” yields the following results:
http://www.moneyunder30.com/who%E2%80%99s-to-blame-for-this-economic-mess
http://www.time.com/time/specials/packages/article/0,28804,1877351_1877350,00.html
As I read the Time Magazine article I notice David Lereah the former economist for the National Association of Realtors…wait a minute…the Chief Economist for the National Association of Realtors. I help pay this guy. Then I start to think, what is NAR? Plain and simple NAR is a lobby group. Not only is NAR a lobby they (we) are the top lobby on the hill http://www.opensecrets.org/pacs/index.php?party=A&cycle=2008
Here is hoping that we can take back control of the association and make it a truly an organization that fosters home ownership, lobby’s our legislators responsibly, and remember its stated vision

“Working on behalf of America's property owners, the NATIONAL ASSOCIATION OF REALTORS® provides a facility for professional development, research and exchange of information among its members and to the public and government for the purpose of preserving the free enterprise system, and the right to own, use, and transfer real property”

http://www.realtor.org/realtororg.nsf/pages/narmission

We are beginning to work our way out of this mess. A number of industry experts started predicting a soft bottom beginning in the second quarter and the beginning of a recovery by Q3. Let’s hope we all learned from the mistakes of the past.

Is this the New Model

2009-04-22T10:33:00.000-07:00

As I was perusing the internet today to look for the latest and greatest in the world of real estate I came across the following web site http://bidonthecity.com/.
Is this a new concept or just a re-play of the traditional real estate auction?
As the real estate industry continues to change practitioners are looking for new options to compete in the new environment.
Although not new to the industry, auctions seem to accomplish there stated goal…sell the property.
Traditional brokerage companies may look to this option. Auctions are transparent, quick, and the fairest why to establish the true market value of a property.
The changing real estate industry promises to be good for consumers. Technology is creating an environment where knowledge is becoming readily available to buyers and sellers.

Good News on the Horizon

2009-04-16T11:36:00.000-07:00

Is the real estate market really starting its comeback? According to a number of trusted sources it seems the long awaited real estate comeback may have begun. Real Trends reports the March homes sales were the best on a year over year comparison in the last 18 months. Business Week has also reported two fairly positive articles on the housing market. Locally in Chicago we see number that are slightly better than those reported by Real Trends. Unit sales were down about 4%. Although prices still haven't made any gains units sales increases will be the key to stabilizing prices.
Back in November there was talk of the "soft" bottom meaning we would see some slight monthly increase as well as monthly decreases. The swing should start to flatten out.
Traditionally housing has led the country out of recessions. It seems that we might be seeing the beginning of the end.

Can Dual Agency Really Exist

2009-04-15T11:34:00.000-07:00

The concept of agency is one that has always been of interest.
I remember looking at my first condo back in Columbus, OH and with in 2 minutes the listing agent handed me a document, asked me to sign it, and informed me that she would be representing me in the transaction. Without taking a breath she then handed me another document saying this form gives my acknowledgement that she was representing both the seller and me (the buyer). Excited about the prospect of owning my first house I went ahead and agreed to the dual agency.
As my tenure in the industry has grown I often look back to that 5 minute conversation and think to myself what a scum bag.
By definition an agent is legally bound to put the client's interest above their own. The nature of the real estate transaction makes this a very difficult proposition. A seller's agent desires the highest price. A buyer's agent is looking for the best deal. I am not an ethicist but this seems by definition impossible.This begs the question; can you actually put the client (people) first and act as a dual agent.
Wouldn't it be wise as professional to explain to a person that we are performing only ministerial acts, or better yet, find a trustworthy colleague to properly represent the other party? Dual agency seems to me to be one of those issues that continue to plague the industry. To me it is the equivalent of walking into a court room and seeing the prosecutor give his opening remarks, then without missing a beat, walking over to the defendant and beginning the defense.

Welcome to People & Properties

2009-04-14T11:08:00.001-07:00

People & Properties is a network of real estate and real estate related professionals dedicated to putting people first.

It is our desire to educate the consumer, provide accurate, transparent, and unbiased information about the process of buying, selling, and investing in real estate. From real estate agents, to mortgage professions, from home inspectors, to insurance agents, People and Properties will provide the information you need to make informed decisions.

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