November 20th, 2007 Bob
I’m a visual learner. From my many years as a high school teacher I know that many of you are probably visual learners as well. I’ve found that once I have a mental “picture” of an idea then I really own it.
Picture a small snowball rolling slowly down a hill. The bottom of the hill is about 50 miles down. Parts of the hill are really steep, parts are pretty flat. As the snowball rolls down the hill it will continue to get a little bigger with each roll. When it’s rolling fast, it grows faster. When it’s rolling slow, it grows slower. But it’s just about always growing.
Now picture trees and rocks lining the sides of the hill. Down the middle of the hill it’s clear. Along the sides there are trees and rocks. When your snowball bumps up against a rock or tree part of the snowball falls off. Sometimes it’s a small piece, sometimes a big piece.
This is my understanding of Warren Buffet’s investment strategy and his concept of frictional costs. Everyone knows that Buffet is the buy-and-hold guy. Buy an undervalued company stock. Hold it for the long run. Big returns. Buffet warns investors to steer clear of frictional costs. What’s a frictional cost? Well, every time you trade a stock you are charged a fee. That’s a frictional cost. Maybe you don’t trade your own stocks, maybe you have someone manage your money. Your money manager’s fees are a frictional cost.
The rocks and trees in my little mental picture are the fund managers and trading fees. The snowball is my money. The 50 mile hill is my investment life. Start with a little snowball and get rolling. Over time it will get bigger. Just stay away from as many rocks and trees as you can.
This picture popped into my head today as I was reading a couple of blogs and real estate forums where people were asking if it was a good time to buy Denver real estate. So many of the respondents simply said that it was a good time to buy. It made me wonder. A brokerage house makes money every time an investor buys or sells a stock. Doesn’t matter if the stock went up or down. The house makes money.
I think a more honest answer to the question: is it a good time to buy real estate in Denver, is: it depends on you. I don’t know if the market is at a bottom. I do know that real estate generally goes up over time, and that if you as an investor are planning on holding real estate as part of your overall investment strategy then it might be a good time to buy. Especially if you are sensitive to your frictional costs. When you are selling real estate your major frictional costs are taxes and real estate commission fees.
Just think of the snowball. If you start rolling a little snowball down the hill and you only let it roll for two miles before it bumps up against a tree and a rock, how much of the snowball will be left? Depends on how steep the hill is, right? Yes, to a certain extent it does. But isn’t it also clear that if you simply let the ball roll for a few more miles that it will likely get a lot bigger?
I don’t think it’s a great idea to buy a house with the intent of selling it in a year or two. Especially now when we can’t tell how steep the hill is. Be smart about your investing. Avoid the trees and rocks as much as possible and let it roll for as long as you can. There’s no arguing that the odds will swing in your favor the longer you let that snowball roll.
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Posted in Colorado Real Estate, Denver, CO, Boulder, CO | No Comments »
November 15th, 2007 Bob
Imagine a company that combines all the satisfaction of a trip to the DMV, with the pricing, comfort, and customer service of the airline industry. That’s what Realtor.com is to us real estate agents.
Let me put it this way– a really, really bad day for me would include:
- Waking up on December 23rd and realizing that I need to go stand in line at the Post Office to mail all of our gifts
- Follow that with a trip to the DMV to register my car–long line, wet floor, perfectly timed lunch breaks…
- Then, it’s off to the dentists office for a root canal
- And just to make things perfect, my wife tells me we have tickets to the musical “Oklahoma!” that evening (Sorry, but I just don’t understand the concept of the musical- so this is a form of torture in my book)
I’d rather repeat this series of events like Bill Murray in Groundhog Day than deal with Realtor.com for one extra minute.
Why do I dislike this company so much? Well, for starters they charge way too much money to us Realtors for “enhanced” listings. The company teases us by offering to list our properties “for free”…but I can only upload one photo. Most brokerages worth anything choose to upgrade their listings on Realtor.com so that they can upload more pictures, change the text, add Virtual Tours, etc. And the fun part is that the more successful I am, the more Realtor.com will charge me for this service.
The folks at Realtor.com have had real estate agents over the proverbial barrel for many years due to the fact that their site draws soooo many visitors every month. It is (was?) considered by many to be the go-to site when it comes to finding real estate listings.
But all that is changing with the advent of sites like Zillow, Trulia, and local sites like Real-a-Save. I happen to think that our website here at Real-a-Save is better than Zillow, Trulia, or Realtor.com. We have all the listings, updated constantly, in an easy-to-use interface, and we don’t demand that you sign in to use our site. If you’re in the market for Denver real estate, or want to peruse Boulder real estate listings, then you will be hard pressed to find a better search feature than ours at realasave.com.
My point is that regional companies like Real-a-Save are making a play on the big dogs like Realtor.com. Our search feature is better, we’ve got more information, we’re nimble and able to add features that our customers want on very short notice–so we’ve got you covered locally. Sites like Zillow and Trulia have the national exposure and growing name recognition that Real-a-Save does not have (yet), and so they present a national alternative to Realtor.com.
As more and more people turn to websites like Real-a-Save locally, and Zillow, and Trulia nationally, Realtor.com becomes less and less of a must for us agents. There may come a day very soon when my clients really don’t care if their homes are on Realtor.com…as long as they’re on Googlebase, Yahoo Real Estate, Trulia, etc. The list of new, cool listings sites grows daily. How long can Realtor.com remain relevant? How long can they continue to charge such outrageous fees?
Stay tuned…
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Posted in Colorado Real Estate, Our Company, Denver, CO, Boulder, CO | 3 Comments »
November 14th, 2007 Bob
Or will it be Trulia? Or another, yet unnamed player? I don’t know. What I do know is that the local MLS providers here in Colorado leave a lot to be desired. Our company, realasave.com, deals with 4 different MLS providers currently and we’re planning on expanding to include another 4 or 5 very soon. Most small brokers don’t have to deal with multiple different MLS providers because they concentrate in just one area. So a broker dealing mainly in Denver real estate would have to deal with Metrolist (the Denver MLS provider), while a small broker dealing mainly with Boulder real estate would likely just deal with IRES (Northern Colorado’s MLS provider). So small brokerages don’t get the perspective that we have in dealing with all of them.
It’s hysterical, really, to look at the rules that these companies have. The MLS provider in Colorado Springs, for example, forbids brokers from giving out address information unless you force a person to sign in to your site. Seriously, they absolutely forbid it. They even forbid you to show pins on a map. Pins on a map! But go ahead and Google “Colorado Springs real estate” and see what you find. You see various companies that are in flagrant violation of these MLS rules. So not only are the rules silly, and in many cases senseless, but many companies simply don’t follow the rules at all.
In Grand Junction you are actually not allowed to speak to the MLS provider. I’m not kidding. You MUST go through the local board of Realtors. I spoke with a very nice lady at the local board of Realtors who was aghast when I asked her for the phone number for the local MLS provider, “Oh no! You can’t TALK to them. You can’t EVER talk to them! If you talk to them then they’ll call me and yell at me and say ‘Keep your people in order’!” I’m not kidding. This conversation actually took place.
Some of the MLS providers are a pleasure to deal with. IRES has a staff that is always helpful. The same cannot be said for some other local companies.
There are over 900 MLS providers in America. And they all operate in a vacuum. They all have their own rules, and each thinks that their rules are the right rules. They don’t communicate with each other…they often don’t even know that the other exists. Again, I’m being serious. Do a little experiment: try to find out how many MLS providers there are in the state of Colorado. Does the National Association of Realtors have this information? You’d think so, but they don’t. Does the Colorado Associate of Realtors have a list? You’d think so, but they don’t. Well, maybe you know a few of the local providers so you call them and ask for a list of their colleagues. They don’t have it. It’s a mystery. Total UFO time. Close Encounters of the MLS Kind. It’s freaking hysterical.
I hope that Trulia and/or Zillow either a) forces a national consolodation of MLS providers into one, giant national MLS, or b) replaces all of the current MLS providers.
You can’t even imagine the expense of dealing with 6-10 MLS providers. We’re talking around $10,000 in monthly fees, local board fees, and upgrades. I’d much rather deal with one provider who doesn’t want to screw me over by selling MY information BACK to me at an exorbitant rate. Yes, they actually sell me back information that I technically own. Let’s leave that for another day. And next time I’ll get on my soap box about what an evil, vile, monster Realtor.com is. Trust me. They are.
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November 13th, 2007 Bob
I don’t think that traditional real estate companies are going away anytime soon. I’m certainly not arrogant enough to think that alternative companies like Real-a-Save will take away all of their business. What I do know is that we offer them some serious competition. We Americans really love a fair fight, and the reason that our economy works as well as it does is that the consumer makes the ultimate decision as to which business succeed, and which fail. The market decides.
I’m ready and willing to put my company up against any of the traditional real estate companies, and I’m confident that we’ll beat them when it comes to service, user-experience on our website, and savings. But I suspect that there are traditional Realtors among my competition who are equally as confident with their own companies. That is as it should be, and I don’t resent the competition, nor do I have any ill-will or anger towards my competition in the traditional real estate world.
But what does make me angry is when various real estate commissions and MLS providers try to set up rules that conveniently give the traditional companies an unfair advantage. In a recent story on Inman News, an MLS provider in Washington state has decided to allow its members to choose which listings to display on their sites depending on the “level of service” (among other criteria) that the particular broker offers.
Translation: brokers who offer discounted services can have their listings conveniently left off of major company websites and MLS feeds. So a company which charges a couple of hundred dollars to put your home on the MLS (this is a type of “limited service” company) can effectively be pushed out of business if, suddenly, lots of traditional companies decide not to put that company’s listings on their sites just because they don’t like the business model. What a wonderful rule for the traditional companies.
This rule effectively allows large, traditional companies to limit their competition. Limiting competition. Are you familiar with the Sherman Antitrust Act?
The Federal government has taken a strong stance against states which currently have “minimum service laws”. Take a look at this link to the DOJ (Department of Justice) website showing which states currently have minimum service laws. Scroll down about half-way to see the list. The opinion of the Antitrust Division of the DOJ is that minimum service laws do not actually benefit the consumer. Here’s a quote directly from the report by the DOJ entitled “Competition In The Real Estate Brokerage Industry“:
“Conclusion:
In sum, it is clear that minimum-service requirements restrict choice by not allowing consumers freely to choose what real estate brokerage services they wish to purchase or not purchase. The evidence indicates that these requirements raise prices by forcing brokers to provide services their customers may not want and reducing competitive pressure on full-service brokers. Additionally, because evidence to date has not shown that minimum-service requirements benefit consumers, any harm they cause is almost certain to greatly outweigh any benefit they might produce.”
Colorado real estate consumers have a choice. If you are looking for Denver real estate or Boulder real estate, or real estate anywhere along the Front Range, then our company would be glad to help you save thousands of dollars on your next home purchase or sale. You’re free to choose a more traditional company as well. That’s the American way…despite such self-serving attempts at changing the very nature of our democracy by various real estate commissions and MLS providers.
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October 23rd, 2007 Bob
The title of this post is taken directly from the US Department of Justice’s new website which focuses on competition in real estate. Needless to say, we were very happy to see that the Department of Justice supports companies like Real-a-Save, going so far as to say: “Offering rebates and incentives is one way that real estate brokers can compete for consumers’ business, leading to lower prices to consumers.”
The bottom line is that consumers benefit whenever companies compete for their business. We know for a fact that our own efforts have saved consumers hundreds of thousands of dollars in commission expenses.
Here’s another interesting quote from the FAQ section of the Department of Justice website:
“Do refunds and incentives pose any risk to consumers?
Some have argued that refunds and incentives can tempt consumers into closing on real estate transactions against their best interests. The Antitrust Division has found no evidence that refunds and incentives harm consumers. On the contrary, they can dramatically lower the price that consumers pay for brokerage services.”
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October 18th, 2007 Bob
We’re thrilled to announce that we’ve just launched our new website. New features include:
- Custom home-search feature
- Detailed neighborhood pages
- Easier navigation
- Comparable sales information
- Home-valuation tool information
- Saved search feature
- Emailed update feature- allows you to receive the most recent listings every morning
We’ll be adding to the website on a daily basis. A couple items that we’ll be bringing to you in the very near future include:
- MLS listings for Summit County and Colorado Springs. Soon thereafter we will have coverage of the entire state of Colorado.
- Detailed schools information
We hope you enjoy the new site. Feel free to contact us with any feedback at info@realasave.com
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Posted in Colorado Real Estate, Our Company, Denver, CO, Boulder, CO, Niwot, CO, Longmont, CO, Littleton, CO, Lafayette, CO, Highlands Ranch, CO, Erie, CO, Superior, CO, Louisville, CO, Broomfield, CO, Fort Collins, CO | No Comments »
September 11th, 2007 Bob
We’ve been working away at Real-a-Save to create an entirely new website. Our new home search feature will be the best one in the entire state of Colorado. We’re confident that you’ll love the new site, and we’re really looking forward to feedback from our loyal users.
Give us about another week or so and you’ll see an incredible new site, with a really cool home search feature.
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Posted in Colorado Real Estate, Denver, CO, Boulder, CO | 2 Comments »
July 25th, 2007 Bob
The leading digital signature company, DocuSign, has issued a press release today featuring our company.
In addition to the press release, there is a podcast featuring Bob Connors, Founder and CEO of Real-a-Save, and Tom Gonser, Co-founder and Executive Vice President of Docusign.
Real-a-Save is proud of our decision to create a Denver real estate company that is 100% paperless. DocuSign has played a key role in allowing our company to be paperless from contracts all the way through closing.
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Posted in Denver, CO | No Comments »
July 20th, 2007 Bob
Just a quick note to those who still think that Denver real estate is a 98-pound weakling: the last few homes we’ve helped on the sellers side have gone on to close for 98% of list price. That’s anecdotal evidence to be sure, but it simply goes to illustrate what I tell my clients all the time: there is stability in the Denver real estate market.
There are even incredible pockets of strength. And the great thing is, we continue to see a rise in out-of-state folks who are calling us with intentions of moving here. Let’s face it, this is a beautiful corner of the country with lots of innate charm and exciting things to do. This fact does not change no matter what the nations real estate experts say.
Just remember that we never saw the huge, double-digit gains over incredibly short periods of time that regions like Chicago, Boston, and areas of Florida saw. So we’re not going to see pricing free fall that some of these places are experiencing now.
Slow and steady appreciation. You can count on it.
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July 17th, 2007 Bob
There’s a great way for you to defer capital gains taxes on your investment/commercial property called a 1031 Exchange. According to Frank Marino of Sun Coast Real Estate, the 1031 “allows taxpayers to exchange real property held for investment or used in their business for new “like-kind” property, while deferring recognition of any capital gains.”
Our own business has seen a huge rise in investors who are interested in Denver real estate given the fact that it is a confirmed buyer’s market. If you’re in the market for a piece of investment property and would be interested in more information on 1031 Exchanges, give us a call and we’ll be happy to help.
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Posted in Denver, CO | 5 Comments »