February 2009

French Connection – Global Intrigue

REALonomics is the business of analyzing business models, in the ever illusive Quest for Model Perfect and of course, providing broker/owners with input and opportunities for creating consumer-centric business models.

We have decided to implement “shops” as a part of our offering to real estate owners and the industry. Shops are nothing more than inquiries designed to ascertain the accuracy of claims and the level of service given consumers by various organizations. Shopping the quality of an organization is not done to embarrass or discredit them. In fact, REALonomics will not post negative information gathered from its shops wherein organizations are named or derided. We will post the positive qualities of organizations, however, and name them.

REALonomics decided to shop organizations that position themselves on the Internet as “International Real Estate Companies” and providers of International Real Estate services to consumers. We went at this with only one criteria, which of the companies found on the Internet by casual organic search provides a consumer with the easiest access to international properties and direct contact with local real estate professionals in well, France.

We wanted a direct French Connection in a specific community in France that could provide us, not with US representation but French representation for a potential real estate investment.

Cracking Open a Google Search for a French Connection

A Google search of “international real estate” yields 109,000,000 opportunities for the user! Switching the search terms to a more broad set of descriptors designed to highlight international companies, “international real estate companies,” yields 172,000,000 results.

But what captured the attention of REALonomics was the list of well known companies identified by Google as being “international real estate companies” that appeared in the organic search on the first page. Here’s the list in order of appearance:

1. Leading Real Estate Companies of the World
2. RE/MAX Residential and Commercial Real Estate
3. ERA
4. Keller Williams
5. Sotheby’s International Realty
6. IRED – International Real Estate Digest
7. Realty Executives
8. Coldwell Banker
9. Weichert

This is truly an impressive list, dominated by well known, highly respected and successful US real estate franchisors (pages 2+ of the Google search lists more!). Let’s get to work, shopping.

Where in the World is Pascal Chevaux?

Three of the companies on the Google list are NOT traditional real estate brokerage companies, these are, Leading Real Estate Companies of the World, Sotheby’s International and IRED. Rather, they are listing services for real estate companies claiming to be international. We tapped into these websites as a consumer might. We wanted to see if we could find what we were looking for, a brokerage firm and property in a specific European country, France. This proved a frustrating experience as we attempted to actually find the cyber path that would lead us to the “International Real Estate” brokers and properties.

So, REALonomics shopped three of the traditional US franchise companies on the list via email (they will remain anonymous) and asked specifically if their International Relocation Department could put us in touch with a broker in a specific city/area of France, our French Connection.

The results were interesting. We received auto replies from two of the three companies we selected. Essentially, the auto responses said they would be in touch soon. One has not replied to the email request at all. Of the two that auto-responded, one of them did get back to us with a great link to their franchise’s French real estate website…a great site and helpful but not the total solution. Because REALonomics was impressed with this company’s truly International Real Estate presence we will name them and show you the link.

ERA was the company with a very impressive online International Real Estate presence. ERA has an excellent web presence that is professional and pleasant to the user. The other interesting thing about ERA’s French website was the ability of the user to view the site in multiple languages. The link sent to us by ERA for French real estate directed us to ERAFRANCE. One thing ERA could do on their company web page is place direct text links to the countries that are a part of their International Real Estate Network.

The second company sent an auto response that included links to agent information within their franchise and a statement that they would try to respond within 24 hours because our request was “their number 1 priority.” As of this post, no response.

Where in the World is Pascal Chevaux?

Of the sites listed by Google as “International Real Estate Companies” we believe the best consumer-centric international real estate website was Sotheby’s International. Why, because it actually demonstrated three important features. First, a vast array of international properties in multiple property types is available for viewing.

Secondly, it was not a mash-up (collection of companies aggregated to one location) that simply serves as another search engine that must be endured by the consumer who is required to mindlessly click through hundreds of links to find a French Connection. The consumer could actually plunge right in with property previews anywhere in the world.

Finally, perhaps more importantly, real brokerage firms, addresses, international telephone numbers and properties in foreign countries that users can access WITHOUT being required to register. Truly consumer friendly. Here’s our French Connection.

Contact: Chevaux, Pascal
1, rue du Mont Baret
Veyrier Du Lac
Veyrier, Rhone-Alpes 74290, France
Tel: + 33 – (0)4 – 50 68 19 38
Fax: + 33 – (0)4 – 50 69 13 58
Languages: English, French

At Sotheby’s I found my guy in less than 5 minutes…enough said. Our congratulations to Sotheby’s for their superior globalization and consumer-centric, consumer-friendly model.

Our industry has come a long way with its Internet technologies. We still have a long way to go with respect to consumer access, ease of use and prompt human interaction to email requests…please, turn off the auto responders. Please, eliminate the requirement to register. Let’s move toward a more transparent real estate industry.

LET US KNOW IF YOU HAVE A SUGGEST FOR AN ASPECT OF THE INDUSTRY YOU WOULD LIKE SHOPPED BY REALONOMICS.

Chill Pill – Blunting the Angst

Economic paranoia continues to ramp up. This market apprehension, coupled with a bad case of industry nausea, continues to prolong the cash flow anxieties of broker/owners, developers and investors. Trying to get everyone to focus on solutions is difficult.

What we don’t need is another dose of the traditional chill pill that will only further fog up our mental capabilities and dupe us into believing that we have nothing with which to be concerned. “Things will work themselves out,” one Broker declared with prophetic glee. We don’t agree. This time around there will be few instant cures that will blunt our angst and nothing we can ingest that will file off the sharp corners of our traditional nervousness. We need sobriety and clarity with respect to how we ought to proceed during the next 24 months.

Yes, you heard it right…24 months. The thrill of the market run-up has been officially squashed by a new reality where sustained growth and profitability are going to remain illusive for perhaps another two years. At least this is the position of REALonomics. Here’s why.

First Impulse: Blame the Presidential Election

Why not? This is the earliest start for any presidential election in history. It’s going to be a long, hard, ugly campaign and the engines of the financial markets will spit and sputter until they know who will occupy the White House. The Fed will be watching, flexing muscle, proving their worth and most of all, intimidating the candidates. There will be angst until we have a new President…pass me a pill.

A host of issues now plague us and create tension that is not easily removed. A cast of nutty Presidential candidates doesn’t help much either, creating even more anxiety for the financial markets. But let’s move on to things we can actually control.

Second Thought: Pick away at the Inventory

While we are doped up on the Presidential chill pill, we have to get the industry back to the basic economic assumption that too much inventory is bad…yes, bad. Too many cans of soup on the shelves of the super market are bad, likewise too many homes are bad. To curb the angst we need to pick away at the near record inventories, one house at a time until we have the inventory level below 6 months in most markets. We need to force ourselves to actually speak the words “price adjustment demanded” to sellers BEFORE we execute the listing agreement.

Third Necessity: Drain the Sub Prime Swamp

Monetary malaria is going to make us sick for some time. The clean up is going to create a very ugly situation and people are going to be hurt by the process of de-toxification. Money will be harder to borrow, lenders will tighten the qualifications, rates may go higher, demand will lesson…ouch, please another chill pill.

Mortgage money is absolutely essential to a healthy industry. But it has to be good mortgage money that doesn’t come back to bite us in the back side in the future. Healthy lending with a make sense, conservative approach to qualification based upon something as novel as “do you have a down payment?” Upside down houses are no better than upside down financing of an automobile. It’s the same inane approach.

Fourth Reality: The New Models will Arrive, Just in Time

REALonomics has been predicting for almost a decade that new real estate brokerage models would evolve from the primal soup of a decaying traditional model. The time is ripe…the stage is set…players are taking positions and staking out their turf in uprecedented numbers. Fleets of battleships and carriers are poised for all out warfare.

New innovative brokerage models are being developed that will position the consumer at the apex of the real estate transaction model. Many of us who have owned and operated traditional real estate companies will finally be entering the confessional saying, “I confess, my loyalty to my agents must be replaced by a new found loyalty to the true client, the consumer.” Some wings of the industry simply will not be able to transition fast enough to reinvent their companies but that is the way of the business. Others will see the next 24 months as a time to step back, evaluate and implement new plans of action that create new business models capable of higher ROI.

Final Consideration: The DOJ will Force and Enforce

It is our position that the current DOJ actions against NAR are just the beginning. The DOJ is going to force certain protocols on the industry under the watchword “consumerism”, code talk for “reduced commission fees” and free access to publicly mandated MLS property information. Changes will be forced upon the industry by the DOJ. What the DOJ forces it usually enforces, as well.

REALonomics believes that the actions of the DOJ can create a wave of opportunity for industry leaders and companies to position themselves ahead of the curve with more consumer-centric real estate models and practices that pave the way for information access and transaction simplification.

Despite these musings, all is actually well…for the moment. The real estate industry is still in a position where it can exercise the bulk of the influence over needed change and ultimately control much of the outcomes. But, what we must respect, indeed fear, is the power of the traditional chill pill to put us into a stupor from which we cannot be awakened.

CB’s Manhattan Beach Office – Model Perfect Award

REALonomics recognizes the Manhattan Beach, California office of Coldwell Banker Residential Brokerage as “Model Perfect” for its innovative, streamlined and cost effective brokerage model.

CBRB is a large operation, but don’t let that create images of traditional entrenchment or lack of agility. CBRB’s application of the second of the Ten Commandments of the New Real Estate Economy, “Get Big by Being Small Everywhere” is evident in their cutting-edge Manhattan Beach office.

A Liquid Digital Office Model

Chris Crocker, Vice President of the Southwest Region for NRT, spoke to REALonomics about the Manhattan Beach model, describing it as an “environment for the mobile agent” consisting of “no assigned offices or private desks” but one where agents can “plug-in a notebook and be connected” to their entire operation. Agents have mobile access to all documents in digital format utilizing VREO’s Dashboard and a Transaction Manager utilizing Planet RE.

Three staff personnel are involved in operating the liquid office model; a Broker/Manager, a licensed Transaction Manager and a Marketing Coordinator who handles communication and coordination of agent/client needs.

According to Crocker, CBRB still wanted a community presence in Manhattan Beach and he stated, “Being small means you can take down prime retail space for exposure.” Chris states, “There are new realities in our business…when an agent comes to the office they are looking for management, marketing and transaction support and a quality place to meet clients…we have designed the office around those who are tech savvy…”

The Manhattan Office Deal Points

CBRB’s Manhattan Beach office is promoted in their online video that outlines the deal points for this business model, which include, among other features:

• Licensed Transaction Management
• Digital Access to Documents 24/7/365
• In-Office Docking Stations, Printers, Faxes, Conference Room
• Paperless Transaction Solutions
• Centralized Processing

REALonomics would like to congratulate Coldwell Banker Residential Brokerage for tweaking their model in its >Quest for Model Perfect.

Please preview our other Model Perfect Award recipients.

Local -vs- National MLS: May ’07 POLL

The REALonomics Polls are now an official staple of this blog and each month we will sponsor a featured polling topic.

Our polls have a great new feature. Voters have the option to select one of the REALonomics poll answers or, if they prefer, they may submit their own poll answers, thus creating an open polling model, where all sides and possibilities can be considered.

The May, 2007 poll addresses the value of the Multiple Listing Service versus a national MLS to your business and the consumer. More specifically, do you believe your local association’s exclusive control of property data represents the optimal methodology for providing property information to Broker/Owners, agents and the consumer?

PLEASE POST YOUR COMMENTS ABOUT THIS HOT TOPIC.

PLEASE POST YOUR COMMENTS ABOUT THIS HOT TOPIC.

Preview the past REALonomics polls.