What Trulia wants from Movity

I came across a news item that Trulia is buying Movity. Since I had never heard of Movity, I looked for its website. All I found on the homepage was an invitation to request an invitation to be a beta tester. On the About page this is what I found:

We bring transparency to geo-data and local content.

When you move, location matters. We answer the questions home buyers, renters, and movers want to know:

• How safe is it?
• Who lives next door?
• How noisy will it be?
• What do locals say?

End goal: Inform home buyers and renters of what the location is REALLY like.

Wow! I’m not sure what they’re going to end up with but I would have loved to be in on some of the product development brainstorming for that.

Everybody knows the three most important things in real estate are location, locations, and location. What opportunity did the folks that founded Movity see? Maybe it’s as simple as mashing together a lot of readily available data to better describe a neighborhood.

I think the opportunity they see might be a little more cynical. In June of 2009 one of the first posts on this site was called Experiment. In this post I described an experiment that I’ve repeated many times since. I go to REALTOR.com, which is still the most frequently visited real estate search tool and run a search in my market and one other market that I’m not familiar with. I don’t put any price parameters in so the first thing I see are the most expensive homes in the market. You would assume that these listings go to the best and most experienced agents. What I’m looking for is what the copy that the listing agents write says about the location…you know, one of the three most important things in real estate along with location and location.

It is always remarkable to me how little mention there is made about location. The reason I originally did the search in two markets was to see if my market was just a fluke. It’s not. In fact, what I discovered was that in markets I wasn’t familiar with the problem was exacerbated. When you already know the forest, focusing on the trees doesn’t always leave you feeling lost. But if you’re moving from Cleveland to Birmingham and have never been to Birmingham before its depressing how unsatisfactory those home descriptions are.

So, rather than try to do a better job of creating a sense of the community and the neighborhood, should we as agents simply wait for Movity to provide the insights? Only if you believe that Zestimates are reliably accurate predictors of market value.

One of the ways a good agent can really add value and earn their fees and commissions is by knowing and communicating the value of the community that the listed property is part of.

Earlier in the year I took over the marketing of a condo project near the eastern edge of Downtown Durham. I don’t know what specific data Movity would draw from to describe the neighborhood, but I’m sure it would show inferior schools, high crime and low home values.  These are not luxury condos but at about $225 per square foot they are pricier than most of the housing in town.  The location actually qualifies for some special financing opportunities because they are in an “under-served” part of town.

What the data won’t show is that this neighborhood is within blocks of the center of restaurant and nightlife activity in a hugely successful downtown revitalization. On the other side of the project a reclaimed mill has become an arts magnet and spark for the gentrification of depressed neighborhoods all around it.

The Realtor.com copy as well as a virtual tour (below) and a video that we produced focused more on the location and the experience of living there than the units themselves.

Sophisticated marketers will understand the importance of selling the benefits of the community and the limitations of profiles pulled from the various databases. In my experiments I’m still not seeing that there are many sophisticated marketers among the listing agents for these high end properties.

506 North Mangum

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Home marketers can learn from auto dealers.

In our post about the real estate distribution system as flea market we had some fun describing how many ways they were similar. We could have just as easily compared the real estate market to a used car lot.

Think about the experience of buying a used car.

You can buy one from a private party, a used car lot, a new car dealership or, increasingly, on-line through sites like eBay. Like the home buying experience or a flea market,  you have lots of options and there are lots of risks that things that you can’t see may leave you with a lemon.

A perfectly fine looking car could have been wrecked, neglected or been through a flood. If you were marketing used cars you would be trying to maximize value and the price you can get by taking away as many as possible of those worries that all car buyers have.

We see this in numerous tactics for marketing cars.

Fairly common is prepping the product. This will include a thorough detailing to make the car look like new and even smell like new.

Also common is something like a “128 point inspection by our qualified mechanic,” who may be drunk Uncle Billy counting the wheels and the door hinges.

The point is to make the potential buyer feel better about a purchase and the more genuine the effort the more effective it is as a marketing strategy.

BMW raises the ante.

Several years ago BMW took this one step further and even changed some of the language in the industry. Instead of used cars, their new car dealers offered Certified Pre-Owned cars. Part of their strategy was to attract potential buyers into their showrooms who might not be ready to shell out big bucks for a new beemer  by offering something that might compare price wise to a new Chevy or Ford but still carry the prestige and panache of a BMW.

By adding warranties to the certification they opened up beemer-hood to a whole new group and allowed them to establish a relationship that might lead to many more sales.

Many other dealers have picked up on the “Certified Pre-owned” idea.

In fact, on eBay Motors you can now limit your search for an automobile to “certified pre-owned” vehicles. Click through to Ebay and you can see what each company offers in their certified package.

Speaking of Ebay…

how do you feel about buying a car sight unseen from a dealership or owner hundreds of miles away?

Ebay Motors is my fantasy playground online so I’ve seen an evolution over the years in the approach taken by them and the automobile marketers that use the site to move iron. These days eBay Motors is much less a way for individuals to market their clunkers…that’s gone to Craigslist…to a place for dealers, many of whom market exclusively on eBay.

The most obvious thing is lots of pictures, sometimes dozens and dozens…the tire treads, under the hood, in the trunk, the keys, the door panels and on and on and on. If there is a blemish, they will photograph too.

The second and more recent thing is the availability of free Carfax reports right there with the listing. A few clicks and you’ll know if the car has ever been wrecked, if there were any obvious mileage rollbacks or commercial use. You’ll also see where the car lived its life because of where it was registered.

Finally, eBay encourages the delivery of a quality product through its feedback system. If a dealer’s feedback is bad, he cannot survive on eBay.

The marketing approach described here is product centric. That is, it focuses on competing by offering a better product that is supported and guaranteed. It’s not the only approach to marketing cars, but it’s a good one.

So, what does this have to do with real estate?

Lets focus on how the product centric automobile marketing strategy can be translated into a real estate marketing strategy. In the next post we’ll discuss what can be done to take some of the anxiety out of home buying by “certifying” your listings with a few readily available tools.  You probably are already aware of them and have used them but have you given them the emphasis that BMW has? This is a product centric strategy for real estate but it also infuses the promotional strategy in the marketing mix for marketing homes as we will see.

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The Real Estate Flea Market

Flea markets are fun.  If you read a few profiles on any of the dating sites and you’ll surely see flea markets as a “favorite thing to do” at least once. This conjures up languid Sunday mornings strolling through the makeshift booths holding hands, people watching and looking for bargains.  It’s sort of like shopping for a home…don’t ‘ca think?

The MLS, no less than CraigsList is our flea market.  Here are the similarities.

Mostly Used Product

Most real estate agents earn their living on re-sales. So we’re often dealing with properties that are  cast off for one reason or another.

Mixed Quality and Condition

Homes have been built by thousands and thousands of contractors, building codes have evolved and maintenance and modification are often done at the whim of the owner.  Like purchasing something at a flea market your due diligence often must be perfunctory and quick.

Product of All Ages is Available

Homes available range from new to antiques.  Only a few flea market shoppers can really tell an antique from simply junk with some age on it.

Anybody Can Enter the Market

The cost of setting up a booth at most flea markets is minimal. There are entrepreneurs who make their livings at the flea market and there are those that get a slot for one weekend to unload household junk.

Voodoo Pricing

The price on the tag at a flee market is for the really naive.  Most regulars just see it as a place to start negotiations. What will actually buy something often depends on how late in the day it is.

Does that sound like real estate or not?

No Returns, No Guarantees

Buy something at a flee market and you’re not likely to be able to return it or get it repaired by the vendor. Most flea market vendors are not trying to develop loyal customers or create a “brand.”  They’re just trying to unload some stuff.

The Differences

Two things make the real estate market different from a flea market and understanding these differences is the key to the 4 P’s approach to marketing homes.

Buying a Home is Not an Impulse Purchase

In a flea market the risks are low. Buying an old collectible plate from the New York World’s Fair might set you back a few bucks but worst case it will just befuddle your heirs when you die.

Purchasing a home, on the other hand, is a big deal.

Real Estate Agents Should Improve the Experience of both Selling and Buying Real Estate.

In theory anyway, good agents remove much of the risk and uncertainty of the sale or purchase of a home.  We think of real estate agency as one profession but it is one profession with two jobs.

The job of the listing agent is much different than the job of the buyer agent. Some great buyer agents are lousy listing agents and vice versa.  Think of the listing agent as the marketing director reporting to the CEO/Owner of the listing.  Think of the buyer agent as a manufacturer’s rep who has relationships through the MLS with most of the sellers in a market.  She doesn’t carry a sample case.

Instead she carries a laptop with access to information about every home on the market.

4P’s Real Estate Focuses on the Listing Side and the Marketing of a Home.

Over the next few posts, I’m going to focus on the listing agent’s role in one aspect of developing and positioning the product.  I call it creating the Certified Home. The Certified Home process is meant to reduce several of the concerns buyers have about purchasing a home in the real estate flea market.

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College athletics will never be reformed because the would be reformers have it all wrong.

I graduated from Notre Dame in the sixties with a degree in English Lit and some swag to remind me that I was a small part of a National Championship football team. I now live in Durham North Carolina and follow the Duke football team almost as closely as I do my old alma mater. In fact, in the forty plus years since I graduated I’ve seen way more Duke games in person than Notre Dame games.

The two schools that are the objects of my fandom have a number of things in common.  They are both relatively small for universities competing in the highest level of college football, they both have sound academic reputations and both are perennial leaders in graduating their football players.  Both also just finished seasons that started with promise but ultimately disappointed.

Notre Dame dismissed its coach.  For Duke it was one more losing season in several decades of futility.

The low points in Duke athletics in the last few years have surfaced a debate that simmers within the University about the emphasis on athletics.  One of the more vocal proponents for “reform” on the Duke campus is a cultural anthropology professor by the name of Orin Starn.

During the notorious scandal involving Duke’s lacrosse team in 2006,  Starn took the opportunity to write in the local papers and lay out an argument for a more Ivy League approach to athletics  that I’m sure is held by many in the academic community. This argument hasn’t really changed since the days I spent shivering during practices in the icy winds  of northern Indiana.

Starn’s target back in 2006 was Duke’s basketball coach, Mike Krzyzewski, whose earnings and influence were apparently hard to stomach among the circle of faculty members Starn represented.  Targeting Krzyzewski seemed odd because the basketball program had nothing to do with the lacrosse team and Coach K’s players  graduate at high levels including a number of outstanding citizens…think  Grant Hill and Shane Battier.

As the real story behind the charges leveled at the lacrosse players unfolded and the hoax was revealed it looked more and more like Starn had been the clever Brer Rabbit waling away at a tar baby set in the road by Brer Fox.

Rather than cook and eat him,  Starn was thrown back into the academic briar patch where he was raised up.  Now it seems he’s picked the tar from his fur and is back sassing what he hopes is a more vulnerable target, the football coach, David Cutcliffe.

My guess is that he has probably misjudged the situation again.  Coach David Cutcliffe is extremely popular and even though Duke didn’t have a winning season they played well against tough opponents,  were vastly improved and fun to watch.  I predict that Starn’s argument will win no one over any more than it did the last time.

Starn and I have vastly different opinions about how college athletics should be reformed.  He’s for de-emphasis. I’m for elevating the sports and awarding degrees in football, basketball, track, etc., maybe even award masters degrees for national championships.

I’ll make that argument, in great detail too, to anyone willing to buy me a beer. Neither of us is going to get our way, however, because college athletics works just the way it is on many levels.

Ok, you’re wondering what this has to do with real estate.  Quite a bit I think. College athletics is often criticized by its academic critics like Starn of being a business, as if this somehow robs the institution (with a renowned business school, no less) of its purity and prevents student-athletes from getting a well rounded education…blah, blah, blah.

Coach K would argue that a top notch athletic program provides an exceptional experience for the athletes and is an enriching feature of the overall college experience for all students.

I would argue that this benefit extends to the community.  Duke athletics is not what has put Durham on the map, but it draws a lot of attention to it. More than that,  the athletic programs help create a real sense of place.  Go anywhere  in the country during basketball season and tell someone that you’re from Durham and you’re likely to hear “How ’bout them Devils.”

It’s hard to imagine South Bend as a community without Notre Dame football weekends. Economically and culturally,  successful teams have a broad unifying appeal in the school and the community.

Paradoxically, an area like the Triangle, blessed with three major research universities with big time sports programs,  is not really divided. The rivalries bring us together in gut ways even the finest museums,  business enterprises, and yes, academic programs,  could never do.

So, if you’re an agent and were writing copy for your listing in Duke Forest, a neighborhood originally developed by the University to attract faculty and staff,  would you mention that you were in walking distance of Wallace Wade Stadium?

Can you paint a picture of a beautiful fall day with the pennants flying and parents walking towards the stadium with kids in tow past happy tailgaters cheering and jeering each other merrily?

Because communities sell houses, good listing agents sell the community.  In a community like Durham we can only hope that Orin Starn gets out of the briar patch…er… library occasionally and enjoys the excitement football brings to the campus and the community.

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Thanksgiving is often seen in the industry as the end of the fall season for selling homes and the beginning of the “dead season” during the winter months.

It’s not true.

I’ve often wondered whether this myth was purposely advanced by successful agents so that they could either 1) Take a little break themselves for the holidays or 2) trick their competitors into taking off the holidays so they could have an advantage soliciting listings.

There may also be a bit of self-fulfilling prophecy here as agents advise potential sellers to “not risk looking stale in the spring by marketing a home during the winter.”  There are lots of other excuses…it gets dark too early for after work showings, the holidays are just too chaotic , there’s too much Christmas advertising going on to get noticed, yada, yada, yada.

In my market the numbers do confirm that there is a sharp drop off during the colder months, on average for the last four years about 40%.  That four year period includes two pretty good years and the last two not-so-good years .But that means that there are still a number of homes sold during the winter months and the market is anything but dead.

When is the best time to put a home on the market?

The conventional wisdom is that the buyers come out in the spring. But if so many people wait  for the spring to list their homes then it simply means there is more competition among sellers during the spring. The more you dwell on the pros on cons of the different seasons the more you conclude that there are lots of exceptions to the rule.

The best time to put a home on the market is when the seller needs or wants to and when the home is ready to be marketed.

Being ready for the market is more important than timing. Apple didn’t launch the IPhone before they had crossed all the t’s and dotted all the i’s in their product development cycle.  That included hardware (really cool), software (even cooler), distribution (AT&T -not so cool), pricing (make the early adopters pay heavily before lowering the price for the masses) and promotion (start a buzz at MacWorld with Steve Jobs’ presentation and let word-of-mouth take over.)

A seller shouldn’t put a home on the market until the same level of preparation is accomplished. It’s a little different when the product is a home but the process deserves the appropriate analysis, planning and preparation. This winter too there are significant buyer incentives available from the government for both first time homebuyers and those “moving up” after 5 years in their existing home.

Winter is not a dead time in real estate. It can be very lively for those sellers who have a tightly integrated marketing plan for their home.

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The 4 P’s are all about the marketing mix but in home marketing the Product is king. And the product is not just shelter. Buyers are also choosing a community and a lifestyle. It’s the whole package you are marketing… not just the house.

Here are ten tactics than can make your listing more competitive. Pick and choose with your client.

1. Pre-inspection. Deals fall apart over inspection issues. Get them out of the way by fixing everything. Challenge the buyer’s inspector to find anything else. If you have a reputation for doing this with your listings, buyers’ agents will remember it too.

2. Home Users Guide. Put it on the counter in the kitchen next to the brochures. Some inspection franchises like Pillar to Post provide a guide for homes they have inspected. Build on it. If you have had a pre-inspection done, include it along with the resolution of the recommendations. Include appliance warranties and operating manuals, maintenance schedules, etc. You are trying to make the buyer feel comfortable about the purchase and the buyer agent anticipate a hassle free transaction.

3. Home Warranty. Easy add. Include the details in the users guide.

4. Green elements. If the seller has made an effort in incorporate “green” energy saving or environmental protection elements in the home, catalog them. These would include energy efficient windows, a composting pit, low water landscaping, rain barrels, solar orientation, etc.

5. Community profile. Use this in a separate brochure or a first person letter to the prospective buyer. Cover schools, recreation facilities, neighborhood organizations and covenants, even favorite local restaurants. Include pictures. Talk about the composition of the neighborhood but be careful of either misleading or steering.

6. Staging. If the owner can afford it, go beyond the typical advice of de-cluttering and cleaning and hire a professional stager. Little touches make a big difference. Include the landscaping. Again, try to go beyond just neat and clean. In almost any season you can have something bright and blooming.

7. Grand Entrance. Staging is especially important for the entrance both outside and inside.

8. Investment potential. Have the home pre-appraised or provide one of the more sophisticated market analyses that includes not only comparables by historical appreciation information.

9.  Interior Signage. Use discreet and tasteful signage to point out features that might be missed or become a question mark, for example, an elaborate chandelier in the dining room, a dedicated dog room or powder room mirror picked especially for the space that could be taken as personal property or left.

10. Pictures. Get the best photography you can afford of the home. Great evening views, holiday views if they are available, and landscaping in different seasons if they are attractive. “Stage” the photographs. The wine glass in the foreground of the picture above adds a little bit of interest and sophistication to a fairly mundane backyard view.

How all this is used to promote the home is a “Promotion” topic but as you gather and document the “product” elements keep this in mind: the goal of most of your promotion is to get showings and getting showings involves impressing two audiences, potential buyers and buyer agents.  In both cases the promotional materials should create a desire to find out more. The showing then becomes the venue for satisfying that curiosity.

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Before I was a real estate agent or even knew what staging was I had a hand in trying to get a company started that wanted to compete in the collectible figurine business somewhere between Precious Moments and Tom Clark’s Gnomes. The business never really got off the ground but all of us involved in it had a lot of fun and learned a lot about all of the 4 Ps of the marketing mix.

We managed to get two of our lines “My Grandma’s the Greatest” (think of Cold Mountain as a comic book) and “Real Men” (this was when Promise Keepers was a big deal) carried by some of the rep groups. The problem that became evident very quickly was that this market is driven by sentimentality and our artist/sculptor was much more into cartoon or caricature. So we went looking for another artist to help us entend a line of licensed college mascots. We found local sculptor, Carl Regutti who has done numerous memorial bronzes including the Memorial to North Carolina’s Fallen Firefighters pictured above. Carl was really a better sculptor of animals I thought and his most famous work is Tristan, a full scale bronze of the first Kentucky Derby winner that is the centerpiece and only full sized equestrian sculpture at Churchill Downs.

Ironically, all of the stuff we were producing is the first thing you want to suggest a homeowner box up and store out of sight when you are staging a home. But one thing Carl taught me is very important to the discussion of staging.  One day we were evaluating the painting of one of our prototype “mascots,” a ferocious looking wolf for the NC State Wolfpack.  I thought it looked great. But without saying a word, Carl took out a small brush and a tiny jar of red paint and applied a thin line above the teeth of the eight inch high wolf.  My jaw dropped.  I couldn’t believe how that one detail could make such a difference.

All of us know that if you show enough homes you begin to get a sense of what’s going to sell quickly and what could sit in the market for a while, price notwithstanding.  Most of us are also aware of the basics of staging, decluttering, de-personalizing, neutral paint, blah, blah, blah.  But it is those little details that often create the “Wow” factor that only a real artist will know how to apply.

Stagers are the artists of the real estate business.  In a competitive market where buyers are scarcer, the competent staging of a home in whatever price range can easily be the difference that gets a better price or wins the offer that might have gone to a similar listing around the corner.

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This guy gets it. To really do a good job representing our listing clients we need to promote the entire experience of living in a community and not just a home. In this blog post on Real Central VA, Jim Duncan doesn’t even mention  a home.

In three short paragraphs he mentions Charlottesville’s academic setting as the home of the University of Virginia, the historic connection to Thomas Jefferson and the job creating engine the university has become.  There’s a lot more he could have said about Charlottesville and he probably has elsewhere in the blog but the theme in this post is JOBS…a timely topic for sure. My only gripe with his post is that he mentions that Charlottesville is two hours from DC and three hours from Norfolk but fails to mention it is one hour from Richmond. In spite of the fact that I grew up in Richmond and still have close family there, “jobs” would not have popped into my mind at the mention of Charlottesville. (What then, drunken fraternity parties? But that was a long time ago.)

It’s important to remember that things we take for granted about the local community are totally unfamiliar to most searchers considering moving from another area. Since the internet gives us the ability to communicate with people all over the world, why wouldn’t you mention the community and its delights  in the copy you write. Does a link buried in your website to the Chamber of Commerce website fill your obligation? Not if you want to communicate that you are an expert on the market.

I don’t know this guy and probably never will but I found it refreshing to stumble upon an agent who could write intelligently about something other than the multi-levels of crown molding and the quality of the counter tops.

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I originally got my real estate license when my agent made more money on the first property I bought to renovate and flip than I did.  There were a lot of lessons learned but one was that if you had a good product you could sell it. The listing agent spent a few hours on the deal and I spent most of a summer.

So, by the time I started another renovation I had my real estate license. Like the first property, this was an older condo/townhouse with a relatively high homeowners association fee…or at least that was my first impression and I didn’t mention it at all in my marketing. When I got a couple of negative feedback messages about the fees after showings I started investigating whether the fees where out of line.

I found out a couple of things.  First, what a HOA provides for the dues can vary quite a bit.  In this particular development the association had been mis-managed for a while and they had to play catch-up as decks and roofs started to require repair. On the other hand, some of the amenities…pool, tennis courts, club house, landscaping…where exceptional.

The second thing I noticed was that most agents totally ignored the HOA in the MLS write ups and promotional materials just like I had. Like me they probably hoped that HOA questions would only come up after the buyer had fallen in love with the home.

I concluded that the HOA information should usually be highlighted, not hidden. In some cases, it may contain the unique selling proposition you need. After all, the point of “condo-ing” is usually having access to amenities that might otherwise be out of reach.  For example, for many individuals owning a swimming pool isn’t worth the expense or hassle. On the other hand sharing the expense with a few dozen other residents is reasonable and may include some social benefits beyond the ability to take a dip on a hot July afternoon.

For my particular project, it turned out the dues where very much in line with other older properties.  Detached homes in similar external condition would eventually require additional investment or decline rapidly in value. My purchase price also reflected the condition. Even after my renovation the cost to the new buyer was less per square foot than new developments. In spite of the HOA dues the total cost of ownership was often still lower than the newer developments or a detached home.

The take away is that as a listing agent of a property with HOA dues,  you should anticipate the objection to a fee  by demonstrating the value. Those that aren’t interested in the amenities and the protections of an HOA are unlikely to buy anyway. It will appeal to many,  including empty nesters and busy professionals without the interest or time to maintain external landscaping or amenities like swimming pools.

Are your experiences with HOA’s similar? Please share your experiences in the comments.