Jeff's Blog

@ $170,000 per Sq/Ft.....You Better be Pre-Approved!

Sudler Sotheby's International Realty — Tue, 25 Aug 2009 16:13:34 -0500

Another buyer backs out of a deal.

The deal seemed like a dream, 20 competitive bids in a 10 day span, a posh address, and a who's who of neighbors. In a story right out of the front pages of today's economic reality the seller needed the money to pay the mortgage, not quite a short sale but maybe a distressed property.

I'm not sure of all the particulars but the winning bidder simply canceled with a simple written statement "I am awfully sorry but I need to cancel this because of the paying problem".

Even the dead are victims of the economy. When the ebay auction ended the occupied crypt above Marilyn Monroe had apparently sold for a whopping $4,602,100. At roughly 8 feet deep and 3 feet high that is some price/square foot.

I guess Richard will have to stay put for now while the other bidders are given the chance to make good on their bids.

Notes from Summer School....What Jimmy Buffett Taught Me about Marketing

Sudler Sotheby's International Realty — Mon, 10 Aug 2009 10:12:10 -0500

Saturday night I went to summer school, not your typical summer school, but summer school as in Jimmy Buffett's 2009 summer concert SummerZcool.

Never in my wildest imagination did I think I would leave that event with a better understanding of marketing. That assumption couldn't be further from the truth. Buffett has an amazing ability to connect with his audience. Most of 30 or 40 thousand parrot heads have as much in common with Jimmy and his Coral Reefers as I do with the man on the moon. However Buffett connected with everybody. How did he do this....He Kept it Local.

Every imaginable reference to Chicago was made. He talked and sang about Bars on Belmont Street, Hamburgers at the Billygoat, Surfing Lake Michigan, Tourists from Iowa, Hookers from South Cicero and had people on the Southside of Chicago singing Go Cubs Go.

Much has been said about being the local expert. Buffett has been the king of local for his entire career. I have seen him in numerous places at various points in his career and each time he made me think the city and venue he is playing is special. It is this ability to connect that keeps this 62 year old, who has only had a handful of radio hits one of the highest grossing concerts year in and out.

Local appeal and local information is the key to keeping and attracting loyal parrot heads. Weather its real estate, or entertainment, people also want to feel the connection.

The Lord Loveth the Cheerful Giver...He Must Hate the Taxpayer!

Sudler Sotheby's International Realty — Sat, 01 Aug 2009 21:44:11 -0500

This afternoon as I was talking to a friend the subject of taxes came up. In case you haven't heard Chicago and Cook County, IL have the highest sales tax rates in the country. I like most people don't pay much attention to the sales taxes most of us pay. However after today's conversation I decided to look at the reciept for my purchases this afternoon.

A quick trip to CVS to purchase a 2 Liter of Diet Coke, some Bud Light (it is the weekend), a bag of chips, and a smaller bag of chips for my buddy is resulted in $1.61 in taxes. 11% in Sales tax...didn't we fight a revolution over this. (Reciept)

A quick analysis reveals the following:

Cook County Charges a 1% Liquor Tax

The City of Chicago a 4% Liquor Tax

There is a 13.25% Tax on my Diet Coke.

In addition to the above liquor taxes my 12 pack of Budlight was taxed an additional $0.92 (10.25%)
My Chips (Junk Food) were taxed @ 2.25%.

In addition to toll roads, state and federal income taxes, the taxes on gasoline, real estate transfer taxes, and God only knows what other taxes we pay daily, it is no wonder we find ourselves in the present situation.

One Bourbon, One Scotch, & One Beer.....And A First Time Home Buyer

Sudler Sotheby's International Realty — Wed, 22 Jul 2009 03:50:37 -0500

Just as I was thinking, I haven't written a Blog in a while, my trusty Blackberry gives me the familiar chirp of a text message. Much too my surprise it is a message from a friend...."Can I buy you a drink or several tomorrow night or the next". Heck we are in the midst of a recession and I have a friend offering to buy me a drink or, as he put it several, George Thorogood quickly comes to mind. I quick reply yep what's up?

Then to my horror I get "I am buying a house". My first thought is it must be a FSBO or he must be buying it from a bank. I text back, "Is it a FSBO". The response, "Nope it is listed by Agent X, with Company X and I told her I am not using an agent". My one word reply "Stop".

My buddy, a single, intelligent, and wealthy commodities trader at the Chicago Board goes on to explain to me that he told the agent this is his first home purchase. It is beyond my comprehension that the listing agent would not have suggested some sort of representation for the buyer. In today's litigious environment this seems to very perilous behavior.

I can only imagine that this listing agent is seeing the sugar plumb ferries of a double bubble dancing in her/his head. An extra 15-20K in my pocket...A long Labor Day Weekend in the Caribbean.

Regardless of whether or not my buddy listens to my advice to get representation over one bourbon, one scotch and one beer tomorrow night, I am confident the sugar plumb ferries will quickly stop dancing as I will arm him with the information he needs to make intelligent decisions.

Once again I am amazed how reasonably intelligent people make very unintelligent decisions when it comes to real estate.

The first bad decision is the error of omission by the agent for not explaining the importance of representation. The second bad decision is the fact that my buddy is willing to make the biggest purchase of his life with Basil Hayden, Johnny Walker, and Augustus Busch as his representative. The third was when I believed my friend when he told me he decided he wasn't going to buy for at least another year, and I quit helping him look.

At least now I have plans for tomorrow night..."give me a triple shot of that juice".

Doc I need a Prescription!.......I Got A Twit, A Tweet, and A Peep!

Sudler Sotheby's International Realty — Fri, 03 Jul 2009 01:08:12 -0500

Back in the Appalachian region of Eastern Ohio any of the above words would be cause for a playground fight.

Dude you are such a Twit! Tweet, Tweet, Tweet.....shout your mouth! Quit being such a peep, buckle it up and hit somebody!

Boy how 20 years has changed the landscape. Now if you twit and tweet to the peep you are cutting edge. Being relatively new to the game I am always looking for a way to twit, or tweet, to my peeps. Today while searching the net I came across www.tweetjunction.com. I am a new user to www.tweetjunction.com but it seems to me that it solves a problem we are all facing, how do we syndicate our content in a quick and effective manner. Tweet Junction seems to solve that problem. The best thing about www.tweetjunction.com is that it is free. I hope you see some usefulness with the site.

While performing my daily search of the latest and greatest I also came across www.peopleandproperties.com. This seems to be something pretty interesting. Active Rain localism meets the real estate franchise meets web 2.0. I tried to go back to the site before writing this post and most of the functionality seemed to be gone. However at 10:00 AM the site seemed to have promise.

As we all prepare for Independence Day, I can't help but think how our founders must have been considered delusional by King George and his minions. And when we consider the most radical thoughts it is real estate....People are entitled to own Property! Say what we will the right to own property is the foundation of the pursuit of happiness.

Thank you....To each and every one of you who help to make this Country a Country Owned by and for the People! Thank You to the Troops who are in the Deserts of Iraq protecting our Rights and showing others the power of individual freedom. God Bless the USA!

Yo Cupcake!........Are you a Stalker or Just Kinda Creepy!

Sudler Sotheby's International Realty — Thu, 25 Jun 2009 07:35:52 -0500

The other day a buddy of mine sent me one of the best blog posts in the history real estate blogging http://www.1000wattconsulting.com/blog/2008/01/i-am-not-a-lead.html (Thanks Marc for helping me find the post). In my opinion it sums up the Realtor/Client relationship in the web 2.0 environment we are now living in now, and quite frankly leaving quickly.

It wasn't long ago that we thought our fancy auto responders and drip campaigns where the silver bullet of customer acquisition (Guilty as charged your Honor). Auto responders, drip campaigns, pictures of our dogs, and an alphabet soup of letters that would make a scrabble champion cry, yea that is what will give me creditability as a professional.

John Q. Public takes a look at the stranger who is sending him/her pictures of their dog, with a strange string of letters behind their name is, and finds a glamour head shot straight out of 1950's Hollywood, or worse yet in my neck of the woods a 1920's Chicago Gangster pose.

Guess what, John Q. Public doesn't care. In fact it is kind of creepy. I get an email from somebody I don't know, telling me what I might want to buy. Get lost!

This leads me to the crux of my hypothesis. Doesn't permission based interactive marketing make more sense? I recently became aware of, and started using a software program called Rezora (www.rezora.com). Rezora gives agents and consumers/clients the ability to really establish a relationship. It is not a guessing game. It is not John Q. Public is on my automated home update list so he is a client. Rezora allows us to quit guessing. Rezora certainly isn't a new silver bullet, but I think it is part of the future.

The traditional thinking of Brokerage is Broke. This is evident by the financial troubles most companies find themselves in today. Print advertising is dead, try to advertise in the Rocky Mountain News (http://www.rockymountainnews.com/), social networking went from a college fad, to 30 million users and a growing revolution is in the air.

How much longer is the consumer going to accept us cyber-spying on them, how much longer is a 1" X 1" add in the news paper going to be considered marketing, how much longer are we going to put up with being kinda creepy?

Is there a new economic model on the Horizon? I look forward to your thoughts, there must be a better way.

Hey Realtor....Your Website May Be A Waste of Time

Sudler Sotheby's International Realty — Thu, 18 Jun 2009 06:47:06 -0500

I have recently been doing a lot of thinking about web sites.

As a Realtor and more importantly a real estate practitioner, I am starting to wonder the strategy of putting so much time, effort, and money into my web site. The facts say that I/We need to have a web presence. But why? What is the purpose of a web site? My thinking used to be to provide the consumer with information, provide the consumer with the ability to search for property, provide me with a way to capture that consumer.

The reality of the situation is there are a number of sources the consumer is going to find and visit before they find my littler corner of the Internet.

May it not be a better approach to have a web site that gives the consumer the opportunity to get to know us as first people first, secondly as agents/brokers, and third as service provides they can count on for professional service?

My new thinking was reinforced tonight as I visited this

http://www.hitwise.com/datacenter/main/dashboard-10133.html

Of the top 20 real estate sites only 6 are actually real estate companies. Two are essentially the same company (Realogy). That leaves us with 5. Meaning 75% of consumers are searching for property everywhere but real estate web sites.

It seems like once again we are behind the consumer wants and needs curve.

I don't have the answer but I look forward to your comments.

Splits vs. Leads

Sudler Sotheby's International Realty — Fri, 22 May 2009 14:11:33 -0500

This morning I was discussing the concept of what do real estate agents really need or want from their respective companies, is it tools and systems to generate and capture leads or is it all about the commission split.

Most companies promise some sort of lead generation. The national brands talk about the consumers predisposition to go with well know brands. The smaller more boutique offices talk about their brand presence in a certain market segment. Both of these arguments suggest the agent is willing to give up a portion of the commission for these lead generation tools. On the other hand the 100% concepts argue that the business is all about the money and the company, for lack of a better term, is just a place for a licensee to practice, an incubator for the entrepreneurial spirit of an agent.

Having read a number of blogs about the pros and cons of both systems is it still feasible to have a company provide all the lead capture and generating tools and have an agent on a 50% commission split? Or would agents rather pay a monthly fee for a packaged or bundled tool box and keep 100% of the commission?

Or can some sort of Hybrid System be worked out. A kind out network an agent could join where leads provided by the network a paid out at 50% and leads generated without the network are paid at 80%-100%?

Is there a perfect balance between commission split and tools? Are there any new programs out there that merit special attention?

Disruptive Innovation

Sudler Sotheby's International Realty — Thu, 14 May 2009 17:20:08 -0500

I recently came across the term "Disruptive Innovation". The term was coined by Harvard Professor Clayton Christensen, and describes a process in which a new concept, idea, product, or service takes root at the low end of a market or industry and then relentlessly moves up the preverbal food chain and displaces the market or industry establishment.

Thinking about our industry, its past, and its future, I began to realize we are now in the midst of what could be the greatest time of "Disruptive Innovation". Looking to the past, I think the dawn of Realty Executives and Re/Max was a period of great Disruptive Innovation. No longer could a Broker/Owner count on an agent staying with a company on a 50/50 commission split. Agents became the center piece of the industry. Agents began branding themselves; the really good ones began operating their practice as a business. An entire industry grow to serve these new entrepreneurs, as a licensee you can't go a week without some company trying to sell you the latest and greatest. The old guard fought this process tooth and nail.

The second phase of "Disruptive Innovation" came with the advent of the Corporate on stop shop. Companies like Cendant (Realogy) and Home Services began to "take back" the industry by providing the consumer a one shop stop concept. Offering mortgage, title, and insurance services these corporate giants began to attract agents offering turn key solutions to agents and convenience to the consumer.

We are now in an environment where technology and consumer demand is radically changing the one stop shop concept. This begs the question, what is the next big "Disruptive Innovation" in the Real Estate Industry. Technology is too broad an answer. My thought is the next big driver of "Disruptive Innovation" is the man or women on the street. I look at some of the recent litigation that has happened and continues to occur and wonder if the industry is, as I think is its history, fighting the "Disruptive Innovation" that the consumer is demanding. The latest controversy I came across is with Google and a Realtor in Indianapolis.

Isn't the goal of any business profit through service. We know what service the consumer wants. Why fight it? I am curious, where do you see the industry going and what do you, the real estate licensees want with the next Big Idea. I look forward to your comments.

To Sign or Not to Sign? A Chicago Story

Sudler Sotheby's International Realty — Fri, 01 May 2009 12:51:25 -0500

To sign or not to sign? That seems to be the latest controversy within the Chicago Real Estate Community. Apparently the City of Chicago has had on its books an ordinance that prohibits advertising signs on public property. Public property certainly includes sidewalks and the like. As Spring approaches the City has indicated that they are going to place added emphasis on the enforcement of the ordinance.

This seems to have a number of my colleagues in a tizzy.

Although I can image that open house signs bring in some traffic I find it very hard to believe the numbers are of any significance. We all know that consumers are getting information from the internet and the "more traditional" methods of attracting buyers and sellers are becoming obsolete.

As a community, Realtors should view this as a positive. The City of Chicago has created a situation where the public is forced to find open house information from the real estate community. Wouldn't it be nice if every buyer needed to consult with his/her Realtor in order to get open house information? I would not object to a law banning for sale signs? Providing information that clients and consumers want and need is the future of the industry. Anything that allows me to do that is a plus.

Your Tax Dollars & NAR Dues @ Work......Or Not

Sudler Sotheby's International Realty — Thu, 23 Apr 2009 01:15:28 -0500

Just what I needed before bed....I get a tweet saying here is a list and map of TARP recipients, http://ow.ly/1YfN . Being the skeptic that I often am I do a Google search for "Firms that received TARP funds" low and behold here is the list http://www.bailout.propublica.org/main/list/index.

The numbers are staggering.

Not being an economist, I start looking for who do we have to blame. A quick Google search of "who is to blame for the economic mess" yields the following results:

http://www.moneyunder30.com/who%E2%80%99s-to-blame-for-this-economic-mess

http://www.time.com/time/specials/packages/article/0,28804,1877351_1877350,00.html

As I read the Time Magazine article I notice David Lereah the former economist for the National Association of Realtors...wait a minute...the Chief Economist for the National Association of Realtors. I help pay this guy. Then I start to think, what is NAR? Plain and simple NAR is a lobby group. Not only is NAR a lobby they (we) are the top lobby on the hill http://www.opensecrets.org/pacs/index.php?party=A&cycle=2008

Here is hoping that we can take back control of the association and make it truly an organization that fosters homeownership, lobby's our legislators responsibly, and remember its stated vision

"Working on behalf of America's property owners, the NATIONAL ASSOCIATION OF REALTORS® provides a facility for professional development, research and exchange of information among its members and to the public and government for the purpose of preserving the free enterprise system, and the right to own, use, and transfer real property"

http://www.realtor.org/realtororg.nsf/pages/narmission

We are beginning to work our way out of this mess. A number of industry experts started predicting a soft bottom beginning in the second quarter and the beginning of a recovery by Q3. Let's hope we all learned from the mistakes of the past.

Sally Whacker Creates Wood 4 U

Sudler Sotheby's International Realty — Mon, 20 Apr 2009 19:38:53 -0500

Spending the last 10 years in a non residential sales capacity I have forgotten the subtle joys of prospecting on what I like to call a retail level. Prospecting, cold calling, and knocking on doors at any level is not for the faint of heart. Being a true believer in the power of the internet I was very excited to get www.jeffcastner.com up and running. I have been studying the latest in SEO, Keywords, and pay per click. Confident that I am going to do what the others haven't, I applied all my recently acquired knowledge to the site.

On Thursday Night the fruits of my labor began paying off. My blackberry gives me the familiar chime alerting me to the fact that I have an email. I quickly look to see who is sending me an email. Holy Mackerel, it is a lead from my new web site. My mind begins racing, yes I am a guru, I knew I had all the internet answers, see that world I am the King of Internet Leads!

I quickly notice my new prospect is named Sally and she is looking for a 3 bedroom condo in Chicago's Gold Coast. Not only am I the King of Internet Leads I am the King of high end internet leads, my ego is saying to me. Without giving it a second thought, I begin drafting an email to my high end buyer Sally. I craft what is undoubtedly the best and quickest response Sally is going to get from any Real Estate Practioner in Chicagoland. The whole time I am explaining to my companion what a genius I am.

With in seconds my email gets kicked back as undeliverable. It can't be, I must have typed the wrong email address. I think Sally must have entered her email wrong. Even through I don't know what property she was looking at I quickly look at the email and notice Sally being a very serious buyer left me her phone number. I start to dial 3-1-2-5-5-5-1-2.....Wait it can't be. Concern, panic, shame, and embarrassment quickly show on my face. Bad email, bad phone number, lets review the lead again. Sally Whacker, sallywhackcreateswood4u@yahoo.com, 312-555-1212, looking for a 3 Bedroom, 2 Bath Condo in Chicago's Gold Coast, price range 150K-199K.

Oh the joys of prospecting. Whether knocking on doors, cold calling, or using the latest and greatest technology it is still a numbers game. Some will, some won't, move on. Here's to you Sally Whacker, thanks for the lesson learned!

Some Good News on the Horizon

Sudler Sotheby's International Realty — Thu, 16 Apr 2009 09:08:40 -0500

Is the real estate market really starting its comeback? According to a number of trusted sources it seems the long awaited real estate comeback may have begun. Real Trends reports the March homes sales were the best on a year over year comparison in the last 18 months. Business Week has also reported two fairly positive articles on the housing market. Locally in Chicago we see number that are slightly better than those reported by Real Trends. Unit sales were down about 4%. Although prices still haven't made any gains units sales increases will be the key to stabilizing prices.

Back in November there was talk of the "soft" bottom meaning we would see some slight monthly increase as well as monthly decreases. The swing should start to flatten out.

Traditionally housing has led the country out of recessions. It seems that we might be seeing the beginning of the end.

Dual Agency

Sudler Sotheby's International Realty — Wed, 15 Apr 2009 14:28:28 -0500

The concept of agency is one that has always been of interest.

I remember looking at my first condo back in Columbus, OH and with in 2 minutes the listing agent handed me a document, asked me to sign it, and informed me that she would be representing me in the transaction. Without taking a breath she then handed me another document saying this form gives my acknowledgement that she was representing both the seller and me (the buyer). Excited about the prospect of owning my first house I went ahead and agreed to the dual agency.

As my tenure in the industry has grown I often look back to that 5 minute conversation and think to myself what a scum bag.

By definition an agent is legally bound to put the client's interest above their own. The nature of the real estate transaction makes this a very difficult proposition. A seller's agent desires the highest price. A buyer's agent is looking for the best deal. I am not an ethicist but this seems by definition impossible.
This begs the question; can you actually put the client (people) first and act as a dual agent. Wouldn't it be wise as professional to explain to a person that we are performing only ministerial acts, or better yet find a trustworthy colleague to properly represent the other party?

Dual agency seems to me to be one of those issues that continue to plague the industry. To me it is the equivalent of walking into a court room and seeing the prosecutor give his opening remarks, then without missing a beat, walking over to the defendant and beginning the defense.

FrontDoor.com Top Things to Expect in 2009

Sudler Sotheby's International Realty — Wed, 10 Dec 2008 23:47:06 -0600

According to Frontdoor.com we can expect the following in 2009

1)Continued Market Adjustments

2)Action from the OBama Administration

3)More Homeowner Assistance

4)A Calming of the Bank Chaos

5)More Review of Mortgage Underwriting

6)Low Prices & Low Rates

7)Cool Tech Devices

8)Wiser Consumers

9)Leaner Greener Home Buying

10)An increase in consumer Confidence

As I ponder these 10 predictions, which I whole heartily agree with, I can't help but wonder what the industry will look like in 3 - 5 years. The continued market adjustments will undoubtedly effective both the number of real estate sales people and brokerages. Those that survive will surely be the best practitioners in the history of the industry.

As the OBama Administration begins to tackle the problem we as an industry need to stay involved in the process by actively lobbying our legislators to not fix the problem with a band aid. All too often we are doomed to repeat history by not learning from history.

With this in mind any Homeowner assistance has to be responsible homeowner assistance. Some people will unfortunately lose their homes.

Any calming in the banking industry and review of the underwriting process will be good. A mortgage banking friend of mine reminded me that the tighter underwriting standards are the equivalent of underwriting circa 1990. People still bought homes in 1990.

Low prices & Low rates should prove good for all of us. As home ownership becomes more affordable buyers should start entering the market again.

Technology, continues to drive the future of the industry. I had the opportunity to meet with a couple of representatives of Zillow this week. I am always amazed that it is industry outsiders who are now driving the change in the industry. Wiser consumers can only help the industry. We as real estate professional have to continually raise the bar and hold ourselves to higher and higher standards. Technology and more informed consumers will force as to focus on our value proposition.

Leaner & greener home buying may very well see the McMansions of the early part of the decade fall out of favor with tomorrow's home buyer. Austerity may very well become chic.

I think in some areas we have already begun to see consumer confidence as it relates to real estate begin to increase. Consumers have begun looking at real estate bargains. Slowly we should see inventories and marketing times decrease.

Just my $0.02

50% Of Home Owners with Loan Modification are Delinquent Again?

Sudler Sotheby's International Realty — Tue, 09 Dec 2008 06:17:50 -0600

As I crawled out of bed this morning and turned on the news I was amazed to here that "50% of all home owners with loan modification agreements are delinquent". Assuming the report is true, I was wondering what this tells us about the current situation in which we find ourselves.

I can only assume that the majority of the delinquencies are home owners who purchased with little down, had very high loan to value ratios, and qualified for loans under the very loose underwriting guidelines in vogue a few years back. I heard an industry insider speak a couple of weeks ago, and he posed a question, "What do you call someone living in a home, that put no money into the home?" Answer a renter.

Housing is the single biggest line item (if there is a line item) in our gross domestic product. I applaud all the efforts the government is making to jump start the housing industry. The first step in this process is to let market forces work, as compassionately as possible, the issue with these types of distressed properties. Once we rid the market of these we will begin to see some "normalization" of the market. As I learned in college, a big party leads to a big hangover, and the only cure is time.

Chicago Market Activity for The Week Ending 12/7/08

Sudler Sotheby's International Realty — Mon, 08 Dec 2008 10:20:30 -0600

The past week's market activity shows that there were 515 transaction sides in the city of Chicago for the 7 day period ending 7 December 2008. The total sales volume for the week was $195,019,021.

The numbers have remained fairly consistent since the beginning of November. Fannie Mae anticipates that on a national level the number maybe down slightly for Q1 and Q2 of 2009. We can only assume that the same will be true on the local level. (See Fannie Mae forecasts @ http://www.fanniemae.com/media/pdf/economics/2008/Housing_Forecast_111008.pdf)

I make this point for a couple of reasons:

•1) Today's activities are Q1 & Q2 sales. It is more important today to go back to basics.

•2) Remember price is King! The homes that are selling are the homes that are priced right. Give your sellers current market information.

•3) If you are waiting for the "good ole days", remember hope is not a strategy.