Real estate stories Archives - The Phoenix Real Estate Guy

I know I can get a better deal working with the listing agent!

February 21, 2012 By Jay Thompson

RING RING goes the cell phone.

(Well, actually the phone ringtone is “The Eyes of Texas”, but it feels silly to type, “‘The eyes of Texas are upon you‘ goes the cell phone”…)

“Hi, I’m calling about your listing at blah blah blah.”

“Well, that’s not our listing, but let me look it up real quick for you.”

“It’s your listing, it’s on your web site…”

“Our site has all the homes listed for sale in Phoenix, hang on just a second…” (We’ve been there, done this before.)

“While you are looking it up, can you tell me what “Owner Agent” means in the listing?”

“Sure, that means the seller is a licensed real estate agent. In Arizona that is required to be disclosed up front. OK, I have the listing information up now, how can I help you?”

“I just want to talk to the listing agent, I have a couple of questions.”

“I understand, there is a lot of info here, I can probably help you…”

“Look, let’s just cut to the chase. I am a cash buyer. You and I both know I can get a better deal working with directly with the listing agent. Can you give me their name and number?”

I make an attempt to tell the caller that the listing agent works for the seller (or themselves in this case) and has their seller / self’s best interest at heart, not you the buyer. But it’s swiftly apparent the caller won’t listen and only wants the listing agents contact info.

Now I could be all douchey and tell the guy to find it on his own. But he seems nice, albeit misguided. We chit-chat a little more while I’m looking through the listing info in the Multiple Listing Service (MLS). I tell him, “Look, I’m seeing some things here that I seriously doubt the listing agent will tell you…”

“Listen, I know you just want to sell me the house. And I’ll call you if I can’t reach the listing agent…”

[No you won’t, I think to myself.]

“So can you give me their number or not?”

“Sure, here it is. Good luck!”

What Did I See?

This particular home was listed for around $280K. The caller knew that. What the caller didn’t know was that the home was previously purchased in November 2011 for about $185K, by an LLC that is in the business of buying foreclosures, fixing / remodeling them, and “flipping” them — reselling them quickly for a profit.

Nothing wrong with flipping for fun and profit.

But do you think the agent / owner is going to tell this buyer that he bought the home three months ago, put $30 – $40K into it and is now trying to get $55 – $65,000 in profit?

My guess is no.

Will the lister / seller “waive” the buyer’s agent commission of $7,000?

Probably. They will at least reduce it, and pocket what’s left.

Is the buyer “getting a better deal” working directly with the listing agent?

Maybe, maybe not.

Personally, and professionally, I think that armed with the following information — that the buyer will never get — they could quite likely save more than the $7K in buyer agent commissions:

The home is overpriced by at least $10K.
The home is “over upgraded”. It has been upgraded above and beyond what is typical for this neighborhood. It looks nice from the photos, but over upgraded homes can be difficult to resell, and they rarely will garner what the upgrades cost.
There is a $55,000 – $65,000 profit margin built into this home.
Some of the neighborhoods surrounding this property are pretty hot right now. An unseasoned buyer (and through the brief conversation I had with this buyer, it was readily apparent they are not very experienced) could easily be lead down the wrong path by a less than scrupulous agent/owner. I’m not saying this particular agent/owner would take advantage of an unseasoned buyer, but I assure you some would. In other words, there is a distinct possibility the agent/owner could produce data showing the buyer there is a hot sellers market and use that misinformation to lead the buyer to believe they don’t have a lot of negotiation room.

But, the buyer wanted nothing to do with having their own representation. They are convinced that they can get a commission reduction and a “great deal” working directly with the listing agent. What they don’t even know is they are working with a relatively high volume flipper who is out for one thing — to maximize their profit.

The buyer may well “save” $7K in commissions, and think they’ve gotten a great deal.

Hopefully for their own piece of mind they’ll never come to the realization that by using a good buyers agent, one who represents THEM and their interests, they may very well have saved ten or twenty thousand dollars. Or more.

Think about it folks. Why would an investor disclose details (that they aren’t required to disclose) in order to get you the lowest possible price on a property that they are trying to maximize their profit on?

Find a good buyers agent. They will work for you, not against you. Don’t plunk down $280,000 and let yourself be represented by the other side. This owner/agent makes their living selling homes for profit. You don’t. Why would you voluntarily go into battle with such a disadvantage right out of the gate?

Photo Credit: Louis Docker, aussiegall on Flickr. CC Licensed.

ReviewOurAgents.com – Yet another website project.

April 21, 2011 By Jay Thompson

Agent review sites ”“ they are sometimes maligned, feared, even hated by real estate agents.

Why, I’m not sure. Let’s face it, the public wants and uses them, the sites are out there, and they are not going away. Back in December I opined on agent review sites in, Real Estate Agent Review Sites. On Zillow, Gaming and Whining. I’ve also left five star reviews for competing real estate brokerages. I like agent/brokerage review sites.

A good real estate agent should, in my opinion, embrace review sites. They should even encourage their clients to use them. Collect a bushel (or even a couple) of good reviews from satisfied clients and you’re well on your way to building some testimonials that can make very powerful statements to potential clients.

A bad real estate agent should, well, consider another occupation.

I love seeing reviews of our agents. I know our agents are remarkable, but it’s always nice when that is validated by their clients. I want our agents to encourage people to review them ”“ publicly, where anyone with an Internet connection can see them.

To that end, there’s a new site on the interwebs ”“ ReviewOurAgents.com

It’s a pretty simple site. Links to places clients can leave reviews, a page to read existing reviews (incomplete at this point, I’m working on it), even a page where someone can leave a review directly on the site.

Aren’t you worried about bad reviews, or competitors slamming you?

That’s a question I’ve already been asked by some people that got a “sneak peek” at the site. Worried about bad reviews? Nope. We hire kick ass agents. Are they perfect? Of course not. And a review that points out some flaw in our service is a learning opportunity.We can’t fix it if we don’t know it’s broken.

Worried about competitors leaving bad reviews? Not really. I happen to think the vast majority of people that read reviews of services and products see right through those immature games. Will it happen? Maybe. And we’ll deal with it if/when it does. Worrying about stuff like this, and not embracing reviews because of that fear, is pointless. These sites are already out there, we’re just trying to make then easier to find by compiling them in one place with an easy to share URL. After all, it is far simpler to say, “Please consider reviewing me at ReviewOurAgents.com” than “Please consider leaving a review at yelp.com/biz/thompsons-realty-gilbert”.

The easier you make it for people to review you , the more likely they are to do it.

And if you’re doing your job ”“ providing world-class customer service ”“ then you should want clients to review you, not fear it.

Right?

The Lones Group v. Rothamel: A case study in destroying your on-line reputation

February 25, 2011 By Jay Thompson

The Lones Group

Oh wait. For the sue-happy out there, let’s start with some disclosures:

I am not an attorney, in any way, shape or form. I consider Daniel Rothamel and his family (also parties to the lawsuit I’m about to discuss) personal friends. And until today, I had never heard of The Lones Group. I have no idea if they are good at what they do, nor do I really care – that’s not the point. Finally, what follows is simply my personal opinion, which I freely admit is biased and slanted due to my relationship with the Rothamel’s. You are also forewarned that this will be an interminably long post”

Lawyers, sheesh. (And no hard feelings to my good friends who are practicing attorneys or aren’t practicing but hold Juris Doctor degrees).

This morning, Inman News (a real estate news organization) posted an article, ‘Real Estate Zebra’ hit with trademark suit. (~~This article will slip behind Inman’s pay wall in the next 24 hours~~ Inman is keeping this article on the free side)

To summarize from the Inman article:

Real estate agent and blogger Daniel Rothamel — known for years to his readers as the “Real Estate Zebra” — has been hit with a trademark infringement lawsuit by a company that produces a “Zebra Report” and “Zebra Blog” to market its services to real estate agents.

Bellingham, Wash.-based The Lones Group Inc. claims its use of zebra-themed imagery and trademarks predates Rothamel’s, and that he is “unfairly diverting business” away from the company.

In a complaint filed Tuesday against Rothamel and his brokerage, Strong Team Realtors Inc., The Lones Group seeks an injunction restraining Rothamel and the brokerage from using “in any manner” the trademarks The Zebra Blog or The Zebra Report, “and any other term or terms likely to cause confusion,” including “Real Estate Zebra.”

The lawsuit also seeks compensatory and punitive damages in excess of $75,000, including an award for damages equal to three times the amount of actual damages. (Note: I removed the link to The Lones Group. Bad reporting. So sue me.)

My first thought was, “You’ve got to be freaking kidding me,” followed swiftly by, “Who the hell is The Lones Group?”

So I did a little research.

My first stop was the legal complaint filed by The Lones Group. It states:

Lones is a preeminent source of electronic publishing and weblog (“blog”) services in the field of real estate. Lones is well known for its distinctive trade dress used in connection with these services (the “Lones Trade Dress”), which features an image of a zebra and zebra stripes.

Lones is also well known for its family of trademarks, THE ZEBRA BLOG and THE ZEBRA REPORT (the “Lones Marks”) used in connection with its electronic publishing and blog services.

Now of course I am not personally familiar with every source of electronic publishing and blog services in the field of real estate. I am familiar with a LOT of them, and admit I was somewhat surprised that I had absolutely zero prior knowledge of such a “preeminent” and “well known source” of real estate blog services. Never even heard them mentioned before. But hey, I’ve only been a real estate blogger for almost six years, so I can’t know all the preeminent players in the space.

My first thought on reading the “about” section of the complaint was that Daniel Rothamel and the Strong Team Realtors aren’t even close to being competitors of The Lones Group. Daniel and his brokerage are not a source of electronic publishing and blog services in the field of real estate. They are real estate agents and brokers, who help people buy and sell real estate. The Lones Group sells things to real estate agents. Plus, Daniel and team are in Virginia, The Lones Group is in Belllingham, Washington. They are 2,869 miles apart (I looked it up).

This was not computing.

Next stop on the trail was The Lones Group web site. (I’m still not linking to it. It’s number 1 “for now” on Google for “The Lones Group”, “The Lones Group Inc”, “Lones Group” and similar terms if you really want to see it.)

According to their about page, “The Lones Group started the Real Estate marketing revolution… and we are darn proud of it!”. Wow. Honestly I didn’t even know there was a “Real Estate marketing revolution”. Silly me, I though real estate agents and brokerages had been marketing themselves since time immemorial. I suppose you could call the somewhat recent usage of real estate blogs and social media a “marketing revolution”. Whatever.

Denise Lones, the President of the Lones Group, has a background in real estate sales but is now apparently, “focused on training others how to provide top-notch customer service as well as restructuring their businesses to efficiently use their time and effectively market their services to potential clients.” Herein lies some remarkable irony. Not only does the Lones Group not compete with Strong Team Realtors, a real estate brokerage, they and their agents are potential clients of the Lones Group. Seems odd to me to sue a potential client. Particularly one as widely known and respected in the real estate social media space as Daniel Rothamel.

And surely, since they started the real estate marketing revolution, the Lones Group is well aware of the impact of social media on real estate.

Surely.

The Social Media Melt Down – The Lones Group Kills a brand/name in an afternoon

Since the Inman article was released, there has been a flurry of commentary on social networking sites like Twitter and Facebook. The vast majority of that activity involves incredulous reactions. Daniel Rothamel is a champion among men. He is one of the brightest, caring and most giving individuals I know. And I am not alone in this assessment. When you read things in the legal complaint like, “Defendants’ (Rothamel and Strong Team) conduct was and is calculated to cause injury to Plaintiff (The Lones Group) in the State of Washington” anyone that is even remotely familiar with Daniel and his family know that nothing could be further from the truth. “Was and is calculated to cause injury”?? I don’t give a shit if that’s “legal speak” or not, it’s insulting and so far from the truth it is ludicrous.

When this whole mess started, there was a crazy number of people saying, “Who is The Lones Group and what is their problem?” Here are some examples from a Twitter search:

“It is an excellent way for the Lones Group to establish themselves as a hated name in the RE industry though”

“the Lones group must be hurting for money and I’ve never heard if then either”

“Lones describes their client base after they are done with the lawsuit.”

“The Lones Group? There’s one company I will *never* use for marketing or anything else they claim to do.”

“It’s funny… I’ve never heard of The Lones Group. Until today.”

“Ridiculous what they are doing.”

“To the Lones Group. Really? I mean Really?”

“Google’s new “Social Search” isn’t looking too hot for the lones group…”

“Denise Lones is a good teacher, enjoyed her classes.” (the only “pro Lones” message I’ve found so far)

“wondering if lones group knows the power of ONE well written blogpost & 30 days of world class SEO…#lonesgroupsux”

And that’s just part of one search. It goes on and on, you get the idea.

The scary thing, or what should be the scary thing for the Lones Group is this is all coming from their potential client base. Sure, there are many many real estate agents that will never see Twitter or Facebook mentions. And in a few days the Twitter stream will die down. So what is the lasting damage to the Lones Groups good name and brand?

Time will tell. There is little doubt that posts like you are reading now will get indexed in Google forever. Even those agents who aren’t active in the social media space are likely to Google The Lones Group. They will be presented with glowing testimonials, along with opinions like this one. It will be up to each of those individuals to decide whether or not to use the Lones Groups services, or to buy the products the Lones Group sells on their web site.

Keep in mind too, the power of word of mouth. It is the most powerful marketing medium in existence. What social media does with word of mouth is vastly broaden its reach. Sure, not every potential client of The Lones Group is on Twitter and Facebook, and clearly not all their potential clients read this blog. But when people with thousands of Twitter followers and Facebook friends jump to defend someone they know and respect it does not bode well for the company on the other side. Word travels fast. The real estate community is pretty tight knit. This will move beyond the social media space and continue to progress through word of mouth and other traditional channels. Of that, I have no doubt.

The lawsuit the Lones Group has filed states that the U.S. District Court, Western District of Washington has jurisdiction in that case because, “the amount in controversy exceeds $75,000.” It also states that, “As a result of Defendants’ conduct, Plaintiff has suffered harm to its reputation and goodwill, and unless Defendant is restrained and enjoined, Plaintiff will continue to suffer harm from Defendants’ conduct.”

Well here’s a message to The Lones Group – I think you’ve done far more than $75K in damage to yourself — THIS AFTERNOON — then Daniel putting a stylized image of a freaking zebra on his website could ever hope to do. The Real Estate Zebra caused you to suffer harm to your reputation and goodwill?

Mayhap you should sue YOURSELF Lones Group for the harm to your reputation and goodwill that you flung upon yourselves with this ridiculous lawsuit.

Whew. 1,814 words. Thanks for reading, I feel better now.

Legal Defense Fund for Daniel

A web site to collect funds for Daniel’s legal defense has been set up at ZebraDefenseFund.com. If there is anything you can contribute, please do so. Short of cash? How about a blog post? Help spread the word. Ask your friends if they can donate. If anyone would like the code to the donation button to put on a post, just let me know. I’ve *never*, not once, asked anyone to link to anything I’ve written. And I won’t do that now. Of course if you want to link to this post, I have no problem with that. If you write a post, let me know and ~~I’ll link to it here.~~ (please see update below).

Fight the good fight Daniel, don’t let The Lones Group bring you down. You ARE the Real Estate Zebra. And you always will be – no matter what happens.

Contribute to Daniel’s Defense Fund Here

Update 2/28:

Sorry folks, I’m not going to attempt to link to all the blog posts on this topic. They are not hard to find. I’ve been accused both publicly and privately of “piling on” (and worse) and it’s just not worth the battle. I’m tired of fighting it with the same people over and over. I’m sure some will feel that I’m giving in to these people, and I understand that sentiment. The bottom line is some of the accusers are right — in some ways. They’re also mistaken in other ways.

This post was written for two reasons — to try to help educate people on what can happen in the social networking space, and to try to help my friend Daniel in a very difficult time for him. I’m not taking that back. People need to understand just how easy it is to destroy your name in the social media space. And I will **never** step down from helping my friends.

You are completely free to disagree with my tactics, the way I’ve chosen to to try to help educate, or my writing style. That’s fine, no problem, everyone is entitled to their opinion. Differing opinions are good. But please don’t tell me or imply that I desire to “destroy” the Lones Group business. That is ludicrous. As I stated in my post, I have no idea if they are good at what they do. They may be brilliant. They may well produce the most visually stunning, compelling and effective marketing material in the country. And more power to them if they do. But they either: 1) do not understand how social media and networking can impact a brand’s perception; or 2) they know, they weighed it, and they chose to move ahead anyway. If #1 is correct, then I hope they and others can learn from this. If #2 is correct, then they took a calculated risk and only time will tell how that pans out for them.

Photo Credit: imjustcreative.com

Stop the Insanity! Ridiculous Bank Practices on Short Sales

February 22, 2011 By Jay Thompson

Thinking about buying a short sale in Phoenix (or anywhere else)?

It’s not for the faint of heart.

Or anyone that wants to apply logic, reasoning, common sense or business fundamentals to the decisions that banks make on short sales.

Here is a real life situation that is coming to fruition today in the wild and wacky world of real estate short sales.

The Scenario

Almost 10 months ago, someone offered $172,000 on a short sale listing in Chandler (a suburb of Phoenix). Six months later, the lender finally accepted the offer. Problem was, the original buyers had grown weary of waiting on the bank and found another home ”“ they had already purchased another property (and shame on their agent for not withdrawing their offer at that time. Welcome to my world).

So the property goes back on the market. Two days after that, we had clients that submitted an offer. They offered $175,000, with $35,000 down and a 30 day close. That’s a strong offer by any measure.

The lender, apparently ignoring everything that happened in the preceding six months and having already approved an offer at less than what our clients were offering, basically started their ridiculous approval process all over again.

Fast forward 3.5 months to today. Despite the extra $3K our clients were willing to pay, despite the previous approval, despite all logic, our clients offer is still not approved.

And roughly 20 minutes from now the home will be foreclosed on.

What’s the opening bid set at, according to the Trustee’s web site?

$150,450.

Yes, that is $24,550 LESS than the offer the bank has had in their hand for the last three and a half months.

The listing agent for this property has tried to get the foreclosure auction postponed. All the players (except the bank) have done everything possible to extend the foreclosure so our clients can purchase the home.

The bank’s response to why they aren’t extending the foreclosure in an effort to sell the home at $175K?

“The short sale process has taken too long, so we won’t postpone the foreclosure date.”

Well no kidding. 10 months is absurd. But check me if I’m wrong Sparky, it is YOU THE BANK that have caused this interminable delay. It is YOUR PROCESS that completely and utterly sucks beyond all comprehension.

So today you might sell the home for $150K. Sure, I suppose it could be bid up over the amount either buyer already offered. Good luck with that. Most foreclosures in Phoenix don’t sell at auction and end up reverting back to the bank. Then they’ll sit on it for months before they put the home back on the market ”“ probably at a list price of $150,450.

“But wait Jay, I don’t understand. They had an offer for $175K. Why would they foreclose on the home and take a bid at $150K?” the astute reader may be asking themselves.

I don’t understand it either. It’s incomprehensible. It makes zero sense. Then again, we’re trying to apply logic, reasoning, common sense and fundamental business practices to a bank. And that my friends, is an exercise in futility that will drive you insane, or make you want to buy t-shirts like this for all the banks and short sale department employees:

(My apologies if you find the above graphic offensive. I find the bank’s short sale processes offensive and it was the best expression of their apparent attitude that I could find.)

Looking for more information on short sales? Below is a link to all articles written on this site about short sales: Phoenix Short Sales

Thinking about short selling your Phoenix home?

Just complete the form below for a no cost, no obligation consultation with one of our experienced short sale experts:

Hi, I’m calling about your listing at”¦ (insert random address here)

December 7, 2010 By Jay Thompson

Every day, every single day, we get calls that go like this:

Hi, I’m calling about your listing at 123 Main Street”

OK, that’s not our listing, but I’d be happy to give you some info on it”

It’s your listing, it’s on your web site. I’m looking at it right now.

Our site shows EVERY home listed for sale in the Phoenix area. Let me look it up for your real quick.

From here, the conversation can take several different directions.

The Disbelievers

Sometimes the caller argues with me, insisting that I am wrong, that we are the listing agents because they are looking at our site.

Trust me, I know what homes our brokerage has listed. There is a boatload of paperwork tied to each and every one of them that the State Department of Real Estate requires me to review and sign. Yet some callers will still all but call me clueless.

Here’s the first hint not every home shown for sale on our site is listed by our brokerage. Below is a screen shot of our Phoenix home search. See the “39,743 properties found” note? I can assure you that Thompson’s Realty does not have almost 40,000 homes listed for sale.

Here’s the deal:

Our site, like many other real estate agent / brokerage sites has what is called an IDX feed. IDX = Internet Data eXchange (why they didn’t call it IDE is beyond me. Trying too hard to be cool I guess). IDX pulls home listings from the Multiple Listing Service (MLS) and displays it on agent sites. Virtually every real estate brokerage sends and allows their listing data to be shared via IDX. Those that do not are, to be blunt, not very bright. You WANT your listings to be seen on web sites. As many web sites as possible. After all, the point in taking a listing is to sell it. Don’t believe me? Just ask your clients. I’ll bet you a ridiculous amount of money that any home seller asked will tell you that yes, they listed their home with you in the hopes of getting it sold, and they want the maximum exposure possible for said home. The internet is really good at getting exposure for your home.

The Angry Brokers

Calls I find the most interesting: Interesting in a “you’ve got to be freaking kidding me” kind of way, are the ones from angry real estate brokers:

Why is my listing showing up on your site!?!

Because you checked the box in the MLS to send it to the Internet.

I get that, but when I Google the address, your site comes up first. And I can’t even find my site at all!

Well, that’s your problem, not mine. It’s called Search Engine Optimization. Check it out some time.

This isn’t fair. My site should be number one for my listing. You must be cheating. I may file a complaint if you don’t take it down.

Knock yourself out.

Or even worse:

Why is my listing showing up on your site!?!

Because you checked the box in the MLS to send it to the internet.

What box?

The box where YOU authorize the listing to go out on IDX.

ID what?

Seriously. If you’re a broker and you don’t understand what IDX is and does, well, you may want to revisit your choice of careers.

The Misguided

These are the calls that can be very frustrating, or very rewarding – personally and professionally. The “misguided” are those that insist that “as buyers” they will only work with the listing agent. Their general thinking is they can “get a better deal” working directly with the listing agent.

Not. So. Much.

Trying to convince people that they need their own representation is most often an exercise in futility. While it seems stunningly obvious that the last person you want to work with as a home buyer is the agent that represents the home seller, making this point to most callers usually leaves me banging my head against the desk in frustration. Listing agents represent the seller, and the seller’s interests – not you the buyers interest. The listing agents job is to get the seller the most money they can. A buyer’s agent is supposed to get you the buyer the home for as little as possible. Why oh why a buyer insists on working with the seller’s agent is beyond me, but insist they do. I could ramble on for 10,000 words about why using the seller’s agent is a bad idea. Yes, it’s true that SOME (but certainly not all) listing agents will cut their commission if they “represent” the buyer. But that’s going to be maybe 1%, (2% if you are exceedingly lucky) of the sales price. A good buyer’s agent can easily save you that much, and quite possibly significantly more.

I’ll spare you the 10,000 additional words on using the seller’s agent. If you’re interested, here are two previous articles I wrote on representation / dual agency. I just re-read them, and if I may be so self-serving and biased, they are pretty good (with great insight in the comments as well):

Real Estate 101: Representation

On Dual Agency

In Summary

We show every (well almost every) home listed for sale in Phoenix on this web site. The only homes that aren’t shown are those where the broker, for whatever inexplicable reason, elects not to distribute their listings via IDX.

Our brokerage is not the listing broker for every home for sale in Phoenix. We’re planning Phoenix market domination, but we’re not quite there yet.

If you are a broker, learn what IDX is and does. (There’s a LOT of information available from the Arizona Regional Multiple Listing Service. Their site has good information about IDX in general.)

Any agent can show you any home, and represent YOUR interests and needs as a buyer. Choose your agent carefully, but chose YOUR agent, not the seller’s agent.

I added this last sentence because it gets this article to 1,000 words, exactly.

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