Condo Blog – A Non-Corporate Blog From CondoDomain HQ

Yesterday, the New Jersey Real Estate Commission (REC) issued a bulletin regarding the recently enacted law that permits rebates to be provided to buyers in residential real estate transactions. Although this new law took effect immediately upon being signed, the REC still needs to adopt new regulations necessary to implement it, thereby allowing licensed brokers to offer rebates without contradicting the REC regulations. In the meantime, however, the REC urges real estate licensees to be guided by the provisions of the Act and by the bulletin. Read the full REC bulletin here. DOWNLOAD FULL DOC HERE (PDF)

NJ Real Estate Brokers and agents can go to the NJ Commission Rebates website here.

If you are looking to by a NJ Condo either in Hoboken or Jersey City please do not hesitate to call us. We recently have opened an office in the New York Condo market and are in the works talking to many NJ real estate agents and brokers to open CondoDomain NJ. We look to be the very first brokerage to offer cash back commission rebates in Hoboken and Jersey City!

via @HobokenRealEstateNews – The Real Deal put out another article following new legislation that hopefully will lift the real estate commission rebate ban in the state of New Jersey!

“The New Jersey State Legislature is toying with a new bill that would allow brokers to cede a portion of their commission to clients in order to close a deal. While New Jersey is one of 11 remaining states in the U.S. to ban the practice, State Senator Nicholas Scutari said that allowing brokers to pay buyers a part of their earnings could help move sales. “We’re trying to help the real estate market and to allow real estate agents and brokers to make deals happen,” Scutari said. The bill, which cleared the Senate’s Commerce Committee yesterday, is now under review by the Senate as a whole.”

Currently there are still 11 states that ban real estate commission rebates which is way down from just 2 years ago.  Visit the DOJ website to check if your state allows real estate commission rebates!

Inman News by way of The Real Deal in New York  published an interesting article regarding the all new MLS in New York City.  As you may  know, New York City has long operated without an official MLS system.  Power brokerages like Corcoran, Prudential Douglass Elliman, Halstead and Brown Harris Stevens have continued to grab massive marketshare and provide “mini MLS’s” via their own personal websites including ONLY their own firms real estate listings.

New companies have popped up in recent years and have made decent attempts to aggregate all New York real estate listings including our favorite StreetEasy, Trulia and even REBNY’s very own ResidentialNYC powered by Pete Flints west coast startup Trulia.

Most recently a joint venture between CBS (Channel 2) and LMG Media launched Manhattans very first VOW (Virtual Office Website) aggregating REBNY’s MLS feed and publicly displaying these listings to the public on their new website – CBS2REM.com

CBS2REM (the joint venture) is backed by New York real estate brokerage – Property Strategies Group – who is listed as the broker entitling the new firm and JV to gain access to REBNY’s MLS feed.  We recently met with Simon Mills, CEO of LMG Media and owner of the JV between CBS2REM and Property Strategies group and he openly told us the pains of accessing the REBNY data and extensive compliance checking.

After just a few short months of operating Simon’s firm is generating great leads and looking to close on their first transactions shortly.   Property Stratgies Group is a full service New York Real Estate Broker … but the real question is – will access to this data open up a new market in Manhattan for discount real estate brokers to come in???

“A new breed of online brokerage is springing up in New York, altering the landscape of real estate sales in Manhattan and worrying traditional firms, who fear the changes may hurt their business.

In the past, New York firms have contended with Web aggregators like StreetEasy and Trulia, which gather and post information on local brokerage listings.

But thanks to a recent settlement between the federal Department of Justice and the National Association of Realtors, the Real Estate Board of New York is now sharing all of its members’ listings directly with online brokerages, known as “Virtual Office Web sites.”

These VOWs, as they are called, allow consumers to view those listings — including those from other firms — online.

Experts say the change will have far-reaching consequences for the industry in the coming year and beyond. Some believe VOWs could also pave the way for a comprehensive Multiple Listing Service, which has long been resisted here.

Eric Gordon, the managing director at Realplus Online Listing Exchange, a shared listing database that’s the closest thing New York has to an MLS, called the emergence of VOWs in Manhattan “huge.”

“In a lot of ways, it levels the playing field between the small and large firms,” he said.

The change stems from a lawsuit filed by the Department of Justice against NAR in 2005. The suit alleged that NAR’s policy of allowing brokers to withhold listings from VOWs violated antitrust law because it stymied competition.”

We have seen companies like Foxtons fail in Manhattan…but was it the market or was it just bad timing???

Experts say the change could open the door for a true MLS in Manhattan. While the Manhattan Association of Realtors currently maintains an MLS, it has only a small number of the city’s listings. Many Manhattan agents have long opposed an MLS because they believe sharing listing information would mean losing business to competitors.

“MLS — agents in Manhattan are scared of that name,” said Derrick Gross, a business analyst at StreetEasy. But Gordon said the increasing transparency provided by VOWs could lay the groundwork for a shared listing database.

Now that VOWs are on the scene, he said, many New York firms have been asking him for software for an IDX, a feature traditionally offered by MLS databases that allows brokerages to voluntarily post listings on other firms’ sites. Unlike with VOWs, visitors don’t have to sign in to see IDX listings.

The IDX concept “is going to grow in popularity now that the concept of one firm being able to market another firm’s exclusives is something people are willing to accept here,” he said.

Small firms say becoming a VOW will help them by allowing customers on their Web site to view all of the industry’s listings, not just their own.

“It’s great,” said Leigh Zaph, president of three-agent firm Manhattan Homes, which is planning to become a VOW. “It allows every broker to be able to present their customers the full database to search.”

Full article Here

Interested in your thoughts on what REBNY’s all new MLS will do to the Manhattan real estate brokerage landscape???  Discount commissions?  More small firms?  Local “hits” on innovators?  Will we see Redfin & ZipRealty enter the New York City market?  Should CondoDomain open the market?  How about other innovative real estate information sites like Curbed & NYCondoBlog – will they get an MLS data feed too?

Today’s headlines on Inman news announced in my opinion the biggest win since the victory we had over the NAR in the DOJ vs. NAR anti-trust lawsuit.

This week out in San Diego for the annual NAR conference, they made an official statement noting that indexing of MLS listings WILL BE ALLOWED.   As you may know (if your a tech geek) this is a huge relief for us innovative (non-traditional) real estate brokerages who leverage technology and “Search” as a way to lower cost for our clients.

Per the article…

“The National Association of Realtors’ board of directors adopted a new policy Monday making it clear that real estate brokers can allow search engines like Google to index property listings displayed on their Web sites under data-sharing agreements with other brokers.

NAR’s board of directors approved several changes to the association’s Internet Data Exchange (IDX) policy as it wrapped up the group’s annual meeting in San Diego.

The changes included the deletion of language that previously obligated real estate brokers participating in a multiple listing service (MLS) to employ “reasonable efforts” to protect listings from “scraping,” or unauthorized duplication by third-party Web sites.

New language prohibits MLS participants from using listing data for any purpose other than display on their Web sites, but clarifies that they don’t have to protect listings from legitimate search engines like Google, which collect information from Web sites and store it in internal databases to make searches faster and more relevant.

The IDX policy, which dates to 2005, sparked a controversy in March when NAR staff issued an interpretation that equated search-engine indexing with scraping.”

The article reads on in detail of the new indexing rule which I see causing some major ruckus in the near term.  One point specifically, as we have been working with regional MLS’s the past year (specifically DC & New York),  the ability to provide reasonable efforts to protect data (which has since gone away).

Much more to come on this as these changes get rolled out regionally.

Read The Entire Article

What a day … between the WSJ article today on the RealComp MLS “loss” to the FTC we have even more hot news off the press regarding similar issues going on in Canada.  I guess this will fast-track our Toronto condo based operation…Canada here we come!

The article….

Canadians in the housing market will pay less in realty commissions and fees if the federal Competition Bureau has its way.

In a landmark investigation, the bureau has concluded the Canadian Real Estate Association has anti-competitive rules and must change its ways, according to documents obtained by the Star.

Details of a settlement have yet to be decided, but the bureau’s findings are expected to have a profound impact on the real estate industry – by permitting more innovative discount brokers into the market while allowing sellers to list their properties less expensively on the Multiple Listing Service.

With a membership of more than 96,000, Ottawa-based CREA is the largest real estate organization in Canada and represents the majority of the nation’s realtors.

“The Bureau is concerned that CREA’s rules have restricted consumer choice and limited the scope of alternative business models,” says an internal memo by CREA president Dale Ripplinger. “Unfortunately, the Bureau seems to believe that CREA’s rules … create restrictions and barriers.”

Continued…

Associated Article (The Globe & Mail)

Today’s post by Bob Hagery of the Wall Street Journal proved to be another huge blow to the NAR and local trade associations fighting to keep MLS data corralled to select groups (or better said any full-fee real estate brokerages).

view the entire article here.

“The Federal Trade Commission ordered an affiliate of the National Association of Realtors in the Detroit area to end practices that the agency found unlawfully discriminate against discount real-estate brokers.

The unanimous FTC decision, announced Monday, was the latest in a long series of skirmishes over competition issues between federal antitrust regulators and the NAR, a giant trade group. Federal regulators have consistently pushed the Realtors, at both the national and local level, to abolish rules that could thwart discounters.

The FTC case was filed in October 2006 against Realcomp II Ltd., which operates a multiple-listing service, or MLS, covering southeastern Michigan, and is owned by local Realtor organizations in that area. An MLS maintains a database of homes available for sale and enforces rules for the brokers who use that information. Real-estate brokers must belong to an MLS to get the information they need on listings. An MLS provides more detail than do Web sites like Realtor.com that are open to the public.

The FTC challenged Realcomp rules that block certain types of listings of homes for sale from being displayed on Realtor.com and other Web sites used by consumers to search for homes. The listings affected, known as “exclusive agency” listings, often are used by discount brokers who offer limited service and charge flat fees rather than a percentage of the sales price.

In December 2007, an administrative law judge dismissed the original complaint by the FTC staff. But the FTC commissioners voted 4-0 to reverse that decision and order Realcomp, of Farmington Hills, Mich., to amend its rules to eliminate practices deemed discriminatory.

Karen Kage, chief executive officer of Realcomp, said that company’s board will decide at a Nov. 20 meeting whether to appeal the FTC ruling in federal court or sign a consent order with the agency. The NAR has provided financial support to help Realcomp fight the FTC case. Laurie Janik, general counsel of the NAR, declined to comment on the FTC ruling.

Brokers have been watching the Realcomp case because of the potential for a national precedent that would influence Realtor practices across the nation. Albert Hepp, owner of  BuySelf Realty, a flat-fee broker based in Minneapolis, said the FTC now has “clearly stated thou shalt not hide the listings of discounters.”

The CondoDomain Boston real estate team is at it again! With Fall in full swing and the Boston real estate business here at CondoDomain dramatically heating up, we have recently just hired three new members to our CondoDomain Boston real estate agent family.

Enter the new class. Remember back in school when the new class would join and everyone looked uh- unfamiliar? It’s exciting, it’s sometimes scary, and everything feels brand-spanking-new. Here at the CondoDomain Loft in Boston’s Fort Point Channel we have added three new desks, rearranged our furniture, and are now ramped up for a rocking Fall in Boston finishing off the last part of 2009 with a BANG!

Meet the newest members of the CondoDomain Boston real estate team:

Say hello to Lauren! Lauren Lanzillo was a CondoDomain intern in the summer of 2008 and just couldn’t get enough of us apparently! She just recently graduated from the College of Holy Cross and has joined an experienced Boston real estate team led by Jessica Anthony Quirk.

Before Jim Lambert joined our newest CondoDomain Boston real estate team he worked for a real estate development firm here in Boston. With his highly localized amount of Boston condo development expertise, we are more than thrilled to have Jim joined our other fellow Boston condo experts!

And last, but certainly not least…our final fabulous addition to the CondoDomain Boston real estate team is Lindsay L. Smith a recent graduate of Boston University where she graduated with a degree in Advertising while simultaneously working as an on-site sales director of a waterfront condominium project.

With the latest additions to the CondoDomain Boston real estate team combined with our already kick ass team of Boston condo experts, Boston real estate firms beware: There’s a powerhouse of Boston condo superheroes in town and they’re just getting started

Meet the whole CondoDomain Boston real estate team

Learn more about CondoDomain Boston Buyers Agents and how we Save You Commission!

Contact us today to learn more about CondoDomain or chat with any of these amazing Boston real estate experts! – 617.314.7704

Boston Condos for sale

Saw this article today and had to read it twice.  What “full service” real estate brokrage in their right mind has the guts to charge an “adminstrative or technology” fee?????  We have researched a bunch of models and even have offered and still do offer multiple service levels including a “flat fee” model and a “full service” model.

Inman News reports on a pretty disturbing trend: As home prices fall and sales volume remains weak in many markets, some real estate brokerages are resorting to charging “fees” to buyers and sellers — on top of the usual commissions.

The fees are usually in the range of a few hundred dollars, but that isn’t even the point. The point is that the fees are garbage — absolute unfiltered, unmitigated, bullcrap. What exactly is the fee for? Inman says they are sometimes referred to as “administrative fees,” “technology fees,” “transaction fees,” “flat fees,” and administrative brokerage commission (ABC) fees.”

The real estate brokers and agents involved in a transaction already collect a hefty commission for bringing together buyers and sellers. Inman reports that “Some who defend the fees say real estate brokerages need to recoup rising overhead expenses and investments in technology.”

That I understand, but isn’t that what the commissions are for? And while real estate brokerages are spending big to try to go high-tech, aren’t there are also some serious cost savings associated with the internet? Agents are spending less money on newspaper advertising and online multiple listing services allow prospective buyers to browse homes on their own and then tell the agent which ones they want to see.   Continue…. (via WalletPop & Inman News)

When you know what you want, your best bet’s a specialist: if you need a bed, go to Sleepy’s, and if you need “Beyond”, go to Bed Bath & Beyond, and just try to ignore the beds and baths. When what you want’s a condo, go straight to CondoDomain.

Based in Boston, pointedly named brokerage CD just grew to include San Francisco, vying to be your online hub for finding condos — and nothing but the condos — by coupling a slick search engine with personal agent care to assist you all the way to closing.

Start by studying CD’s Gmap of on-the-market properties (populated by MLS data, new construction developments, foreclosures, etc), which upon mouse-hovering’ll pop up exterior snap shot/price range/# of units; click “view full details” for a Google Street View, a Walk Score, and a physical/historical building descrip (if it reads “lubricated”, you added an extra “m” to the url).

The next step: opt for “Full Service”, and you’re paired with an actual live local agent to help scout/compare properties, or go it alone and arrange tours yourself; either way, CD handles final paperwork & negotiation, and at closing’ll return either 20% of the commission (for “Full Service”) or 90% if you found the place yourself — money you’ll need to drink away the fact that your walls are actually made of rats. Mean, horrible rats.

CD also informs buyers with a blog about the SF condo landscape, which analyzes market trends, specific properties, and neighborhoods — over-educating you to the point that you’ll burn out on condos, and settle for Bed.

Entire Article

So…

After more than 18 months and 100 transactions in the brokerage business we have finally collected enough data and consumer feedback to make the next adjustment to our ‘non-traditional’ business model.

As many of you know, our company has had an extremely strong opinion and very public voice regarding real estate commissions in this new online real estate economy.  Our belief structure and core principles are still the same, and we believe with the availability of public accessible real estate information, including easier access to MLS systems and public record information, has made the sales process more efficient for consumers engaged and interested in performing search, compare and valuation analysis online.

So where have we changed?

Two crucial data sets have led us to alter our buyers’ brokerage business model.

1.    Top priorities for buyers during the purchase process:
After multiple online and offline surveys performed by our company, the single most important aspect to our clients was NOT our highly promoted “Cash Back” commission refund business model.

The #1 priority to our clients was agent expertise.
The #2 priority was our website.
The #3 priority was our transparent and our professional approach to real estate.

2.    Time:
The second most important aspect that has led us to alter our business model is time.  Whether it just be current market conditions or realities of this new real estate economy, the amount of time spent with our clients touring properties was nearly double than what was anticipated from our original business plan.

Our original plan had estimated that we would tour 4-8 properties on average before a client submitted an offer to purchase.  Even though we have had both of the extremes from two clients whom we toured the property zero (0) times making the transaction extremely profitable for us, however, we have also had the opposite with touring more than 25 properties before submitting an offer.  Currently we are averaging 14 property tours per client.

So what is the new business model?

Here at CondoDomain we are announcing a hybrid-model that some may call ‘a la carte’.  We will now be offering two service levels, best described by our (1) Pizza or (2) Sushi comparison.

1.     Full Service Buyers Brokerage (Pizza)
Those going for the Carb-load, this option is for you.  Our full service buyers brokerage will be like it has always been.  Personal service, unlimited property tours and every other goodie that our agents or the CondoDomain team & website delivers.

This option will include 20% commission refund for all buyers who purchase with us.  On average, our $500,000 buyers will receive a cash refund at closing of $3,000.  For most this will cover all of your closings costs of your new home!!!  Through some analysis, we have come to the conclusion that today’s real estate purchase process is approximately 20% easier for real estate agents because of technology and publicly accessible information, therefore a 20% commission refund would make sense and allow us to compete on a very high level attracting the best real estate agents in the business which would allow us to accomplish our #1 goal of having top agent expertise.  More details here.

2.      Flat Fee Buyers Brokerage:  (Sushi)
We are launching this service for our “true” do-it-yourselfers.   For all of our viewers and clients who have a top priority of staying “lean” and saving money – the Flat Fee model is the way to go.

In every city we will offer to help broker a real estate transaction for a flat fee of $5,000 – no matter what the purchase price of the property is.  We will engage you as a full service client without limitations EXCEPT with property tours (therefore reducing our Time/Cost differential).  With this service, we will go on a maximum of 3 property tours with you.  After the third property tour our relationship is automatically flipped into our full service program which will still net you a large cash back commission refund of 20%.

Why Flat Fee:  Since our inception as a true buyers broker in January 2008, we have always promoted the flat fee buyers brokerage business model.  We truly believe in it and think it makes sense for efficient and precise real state transactions.  For consumer who are truly leveraging new technology and are heavily self-motivated and engaged in the real estate search and compare process, the flat fee model is ideal.  It allows the client to engage an experienced professional to assist in the home-buying process while providing maximum savings to the consumer.

While both our full service buyers brokerage and flat fee business model saves clients thousands of dollars, the flat fee model starts to net significantly larger savings on purchases over $500,000.  More details here.

What do we hope to accomplish:
As a company, we believe this structure is ideal for the consumer base that we engage.  Providing a 20% cash back commission refund is a significant amount of money at any price point, therefore enticing a highly competitive advantage in the marketplace.  This balance also allows us to attract top real estate professionals to provide our clients 3 top priorities:  agent expertise, technology/better website and allow us to publish more transparent information on the marketplace.

CondoDomain aims to continue to be a leader in the urban real estate marketplace specializing in working with buyers, elevating the brokerage profession by providing excellent customer service and a go-to media site highlighting the latest and greatest in residential property downtown.

Related Posts: CondoDomain Year 1 Results:  Whitepaper,  Customers want transparency (Redfin), Other CondoDomain posts regarding the real estate commission stucture