Why Zillow’s ‘Instant Offers’ Pilot Program Doesn’t Matter

Zillow is testing a new program in a couple of markets.  They have a pool of investors who will generate an instant offer on your house, picking it up on the cheap without the time, hassel or expenses usually associated with an ordinary real estate transaction.

There’s nothing new about this. For more than a decade, investor groups have created marketing campaigns to help them identify home owners who will take significantly less for their properties to have a swift and hassel free transaction.  And there are people for whom such an offer has great appeal.

I think about my good friend who, at age 80, wanted to divest himself of a rental condo that was a mess.  He considered the value, and was about to list (with a Help-U-Sell broker!), when an investor group contacted him out of the blue.  They gave him about 80% of fair market value.  He took the offer because he wouldn’t have to clean the place, do extensive repairs, sweat out inspections and appraisals or pay many of the normal costs associated with a sale.  Yes, he lost money . . . or rather he exchanged some money for convenience and quickness.  For him, it made sense.

As the real estate industry continues to scramble and ‘innovate’ to re-establish an identity with consumers, some recent entries to the business have adoped a similar approach.  Open Door, now in Phoenix and a few other markets, is buying houses in much the same way.  They are marketing the program as a new approach to residential real estate, one that relieves many of the ‘pressure points’ that weigh so heavily on home sellers. (Translation:  they are buying low, paying cash, fixing and flipping).

The first time I encountered this kind of program was back in the 1970s, when ERA Real Estate built their whole marketing program around the notion, ‘If we don’t sell your house, we’ll buy it!’  It sounded pretty good.  But after a few years it became very obvious that they weren’t buying many (or any) houses!  The terms of ‘we’ll buy it’ included a sales price based on 70 – 80 % of value, and few sellers were willing to take that kind of hit!

The Zillow program – if it survives the pilot, which it should – will appeal to some home sellers;  but they are the same home sellers who are by-passing brokers to take a quick fix already.  It is competition for HomeVestors (the ‘We Buy Ugly Houses’ guys) and Open Door more than competition for us.

Listen:  we have the best program in the business for home sellers interested in making a move with minimum inconvenience while maximizing their hard earned equity.  While  40+ years old, it still looks wildly innovative compared to current alternatives.  Don’t get distracted!  Remember who you are:  you are in the Equity Preservation business!*  And nobody does it better than you!

*Everyone else is in the Equity Consumption business!  They are into taking as big a bite out of the seller’s equity as possible.  The ‘We’ll buy your house’ people are just taking an even bigger bite!

Flashback Friday: Flea Circus

‘How do you train them not to jump?’

‘For two months I keep them in a low jar.’ He reached behind him and retrieved a little screw-top container, about an inch and a half tall. ‘At first they jump and jump in there. I can hear them bang their little heads on the lid, bing, bing, bing. But after awhile they adjust. They still hop, a little; they just don’t leap. That’s when I take the lid off and they are ready to train for the circus . . . they’re not going to leap away.’

This is one of my favorite posts.  It originally appeared in early 2010.  I have more to say about it, but don’t want to spoil it for you , so I’ll save it ’til the end . . . 

I live 22 miles from the Mexican border and, like many Southern Californians, spend a lot of time in Baja.  One of my favorite drives is the Routa Del Vina — the wine route — that runs from Tecate in the North to Ensenada in the South.  This sixty mile stretch of highway winds first through mountains and then through dozens of Mexican wineries.  Yes, Mexico makes wine.  It’s generally not very good, but they’re working on it.

In the heart of the region, a dirt road takes off to the west from the highway and leads to a dusty little town called Ejido El Porvenir — Town of the Future.   It may have been the Town of the Future in about 1924, but nothing much has changed since then.  It’s mostly just dust and mud, dogs and farmers and tumble down houses, a small, humble church . . . and Beto’s Circo de las Pulgas — Beto’s Flea Circus.

Beto is a weathered old dude who, like everything in Ejido El Porvenir, is dusty.  He’s missing a few teeth but still manages a nice smile when guests stop by. For $4 US, he will lead you through the little house he shares with his granddaughter and her children to the workshop in back where he keeps his Circus.

The show is presented on the bottom of  a 2′ x 3′ corrugated cardboard box with the sides cut down to about an inch that he pulls from a shelf and sets on a rickety table in the middle of the dirt floor room.  He’s painted the box white — well, it was white, once —  and it functions as the stage for his little flea actors.  He’s got one that walks the tight rope, a few that will kick a tiny ball around, one that rides on the back of a green beetle, and three he harnesses to little carts and then implores to race from one side of the box to the other.  It’s both as silly and fascinating as you might imagine.

After the show, I sat a while, chatting with Beto, he using very bad English, me struggling through equally bad Spanish.  I learned he’s 73, been working with fleas for about 10 years, and took it up to pass the time after he became too old to be useful in the grape arbors.  He gets three or four paying visitors a week but also does free shows for the neighborhood kids who regard him as a funny kook.

‘So, how do you train fleas?’ I asked.

‘Es Facil,’ he replied; it’s easy.  ‘The hardest part is teaching them not to jump.  A flea can jump two, three feet normally.’

I pictured the house I listed 30 years ago in Atlanta.  It had just been vacated by tenants who had dogs and when I walked into the living room, I was bombarded by a hail of hungry fleas flinging themselves at me from the floor. Yes, fleas have very strong legs and they certainly can leap.  Why didn’t these fleas just leap away?

‘How do you do it?’ I asked, ‘How do you train them not to jump?’

‘For two months I keep them in a low jar.’  He reached behind him and retrieved a little screw-top container, about an inch and a half tall.  ‘At first they jump and jump in there.  I can hear them bang their little heads on the lid, bing, bing, bing.  But after awhile they adjust.  They still hop, a little;  they just don’t leap.  That’s when I take the lid off and they are ready to train for the circus . . . they’re not going to leap away.’

‘Wait a minute,’ I asked, skeptically, ‘You train their natural tendency to leap out of them?’

‘Sure,’ he said through that almost toothless smile.  ‘After a few weeks of hitting their heads on the lid, they learn to stop jumping, and they’ll never do it again.’

How  sad, I thought.  These creatures were born to leap and they’d allowed him to take that away from them.  I gave him a puzzled look.

‘It’s just like people,’ he continued.  ‘You can train the dreams right out of the people.  If you place enough barriers, enough restrictions, they come to believe their dreams are impossible.  They give up, and then they live quietly in the world you’ve defined for them.  Every dictator knows that . . . I’m just a flea dictator.’

It started to rain as I left Beto’s house.  The  dusty road turned into a mud bog and soon the Jeep was covered in the stuff.  I’d be bringing a little bit of Mexico back across the border with me this night.  As I drove through the gloom, I thought about what Beto said, and about our current reality:  Help-U-Sell, Realtors in general, and the very tough real estate market of the last few years.  We all made adjustments to make it through. We cut expenses, moved to smaller space, consolidated.  They were necessary cuts.  But, like the fleas, we also cut expectations.  Where we once shot for 10% market share and considered 10 deals a month to be ‘just getting by,’  we came to believe that 2 or 3 or 4 a month was ok.  We could get by with 3 or 4 and not bang our heads on the lid of the market.

Look around.  Yes, things are better today.  The real estate business comes with a new set of challenges – low inventory, rising interest rates – but it’s not as constricted as it was a couple of years ago.

But what about that patch of real estate between your ears?  Did you get so used to the redecorating you did in there during the downturn that you hardly notice the change anymore?   Have you let last season’s reality put a permanent damper on your dreams?  Or can you still see yourself doing 100, 150, 500 deals a year?  You can, you know.  Step by step, stage by stage, phase by phase, you can.  And, truth is, until you believe it, until you expect it, it’s not going to happen.  You’ll just be hopping along, stopping a millimeter or two shy of the lid someone else put over you a long time ago.

Look up.  There is no lid.  There’s nothing but blue skies overhead.  Stretch out your legs and get into your leaping crouch.  It’s time to liberate the fleas!

. . . . . .

So many people have read this post and assumed it was a true story . . . and it IS, up to the point where Beto is introduced.  From that point forward it is fiction; or rather, legend.  

The flea story has been around for some time (Google it) and I remember hearing it told with great flair by the former President of Help-U-Sell, Rick O’Neil.  In his version, he was a boy in New York City and the flea circus was in a basement on 42nd Street.  

I’ve been asked more than a few times how to find Beto, once by a resident of Ejidio el Porvenier!  

It doesn’t matter that Beto doesn’t exist and that the circus may never have existed anywhere.  The image of self-limitation is powerful.  

When I feel myself covered up with can’ts and yeah-buts, flinging themselves at me like fleas from the floor, I pause, look up, notice that there is no lid, and go back to doing the impossible. 

 

 

Flashback Friday: I Am Help-U-Sell

Flashback Friday is what?  About 8 1/2 hours late this week.  For that I apologize.  But I think I have a good one to recycle today.  It’s from December 2009 and it’s a bit of a mantra or maybe an affirmation.  Since all good things begin with gratitude (not the other way around), here’s a little juice to prime your attitudinal pump:

I am Help-U-Sell.

I am grateful for a business model that generates a profit while saving sellers money

I am grateful for market data that enables me to make logical, structured marketing decisions

I am grateful for premeditated marketing that maximizes results

I am grateful for leads management that enables me to know when marketing produces results, where I need to work harder to convert leads, and who on my staff is performing well

I am Help-U-Sell

I am grateful for ‘Sold and Saved’ properties that tell the world that I am here, people use my service, and it works

I am also grateful for testimonials that say the same thing

I am grateful for my own special color:  Red, and for the signs that are recognizable a block away

I am grateful for car wraps

I am Help-U-Sell

I am grateful that I produce so many buyer leads that I need help to manage them all!

I am grateful that I can provide a place for a good agent to sell more real estate than they ever dreamed possible

I am grateful that I don’t need a huge retail space and dozens of desks to run my business

I am grateful that I am so feared by my competitors that they spread false rumors about me

I am Help-U-Sell

And I am IN the real estate business, not the recruiting business

I am Help-U-Sell and I live and die by the quality of the work I do for buyers and sellers and by the money I save them

I am Help-U-Sell, and I am grateful for the opportunity

I know that the system works and I am grateful to work the system

I am Help-U-Sell and even in the darkest hour I am optimistic about the future

I am Help-U-Sell and I will always find a way

I am Help-U-Sell and you can’t kill me

No matter what the turmoil, the chaos the bad decisions and broken promises, you can’t destroy me

I have a life of my own and I am bigger than any of the dogs that nip at my hem

I am Help-U-Sell.

I am well.

And I am ready for 2010.

Bring it on.

Zip-It

Inman News has a headline story today about Zip Realty launching a new mobile-friendly website. This is really important in today’s real estate world. Increasingly, consumers are using mobile devices (cell phones and tablets) to access the Internet and therefore listing information. Clearly, if your property website is not mobile optimized, the consumer using a phone for access is going to have a very funky, scroll-heavy experience.

Here’s the rub: Help-U-Sell has had a mobile optimized website for almost two years.

Really. I can’t say we were the first . . . but (as usual) we were in the first wave. Consumers who go to helpusell.com using a mobile device are automatically redirected to a mobile optimized site. They have the same powerful helpusell.com experience, but they have it on their phones and tablets.

What I can’t understand is why, when we innovate, when we are ahead of the curve, when we point the way (as we have done and have been doing for years), the national media, Inman, RIS, NAR et.al. ignore it. They will faun all over Re/Max when it does something we did last year . . . but recognize us when we do something remarkable? Never.

It underscores the fact that, in real estate, there is the status quo (populated by nearly a million REALTORS) and those who earn a living off them (the real estate media, the National Association of REALTORS, et al) and there is Help-U-Sell. We may be the best idea since sliced bread, we may have the best program for consumers, we may be technologically WAY ahead of the status quo, but as long as THEY are supporting the media, our story will never be told.

The only thing we can do is to succeed, as we always have done. We build and grow, build and grow. Ultimately, the contest between the status quo and Help-U-Sell will be decided by consumers. The more of them we serve (and the better we serve them), the more the scales will tip in our favor. And someday . . . someday . . . someday most consumers will be having a quality set fee real estate experience, wondering why it was ever done any other way!