Smart Home Buying

Thursday, January 31, 2008

As a Stanford Business School Alumnus and a Real Estate Broker, over the years Stanford invited me to give seminars to the graduating students on home buying strategies.  After all, many of the Stanford Graduate School of Business graduates land high paying jobs and are anxious to buy their first home.

These students are trained to think analytically and like checklists.  So do I.  This summary is pulled from my seminar archives on “Smart Home Buying”. 

Don’t

• Buy without a really good real estate agent
• Ask everybody for his or her opinion
• Buy during hot markets (i.e. spring)
• Get involved in crazy multiple offers
• Buy a home with foundation problems
• Buy a home with “major unfixable negatives”
• Do significant remodeling while living there
• Over analyze
• Think of your home as just an investment
• Expect perfection

Do

• Use a really good local real estate agent
• Have your cash and loan approval in place
• Go online to educate yourself
• Go to open houses to educate yourself
• Buy properties that have been on the market for a long time
• Buy when others aren’t
• “Go for it” if a home “comes close” to your needs
• Buy the best location you can afford
• Have thorough inspections
• Multiply remodeling cost estimates by 1.5X
• Multiply remodeling time estimates by 2X
• Plan on a minimum of 3-5 years for net profit

Where Do Real Home Buyers Come From?

Friday, January 25, 2008

As CEO of CleanOffer.com I need to know what’s going on out there in the big, bad world of online real estate.  In addition to my CleanOffer duties, I remain an active real estate broker selling homes locally.  This keeps me current with the market and helps me better understand what works about the CleanOffer product and what needs improvement.  Plus, closing an escrow does pay nicely.

Being immersed in both the online and off line real estate game gives me an interesting perspective and keeps me asking questions like:  “How has the web changed the agent-client relationship and where do real home buyers (the ones who actually buy homes) come from today?”  (How Do Consumers Choose an Agent?) 

We all know that buyers are increasingly searching for homes online.  In fact, the National Association of Realtors now says that over 80% of them use the Internet as part of their home search.  It seems logical then that with access to all this information, buyers would be less likely to use a real estate agent. 

In fact it is just the opposite. Over the past 10 years, as buyers radically increased their use of the Internet in their home search, they also increased their use of real estate agents to complete the purchase transaction.  Why?  While empowering, all this online information only increases a buyer’s need to have a local agent to help interpret it.  Homes are not commodities.

So if increasing Internet use amplifies a buyer’s need for agent representation, then the next logical question is:  “Are real buyers finding their agent online”?  As pointed out in Buyers, Sellers: Realty Agents Rule, the answer is NO. In fact only 5% of the buyers who closed escrow on a home last year found their agent online!

Real estate is a relationship game. Buying a home is simply too significant of a transaction for most people to be comfortable working with an agent they don’t know or weren’t referred to by somebody they trust.  When I got Lasik eye surgery several years ago, I did lots of research on the Internet first.  However, the doctor I chose for the procedure came from a personal referral.  Those advertisements for, “Buy one eye and get the second one free” just didn’t feel right to me.  Likewise, most home buyers are not persuaded by the picture of an agent or taglines such as,  “Top Producer Who Cares”. 

It’s still who you know.  I guess some things never change.

New CleanOffer Blog Launched!

Wednesday, January 16, 2008

Most of us make New Years resolutions. Include me in that list. One of our resolutions this year at CleanOffer is to communicate better and be more transparent with the agents, homebuyers, and homesellers who use CleanOffer. As pointed out in Inman News, people expect a “New World Transparency” in real estate.

The web is awash in online real estate sites. The vast majority of these are designed to be so called “lead-generators” for agents and brokers. CleanOffer is different. We seek to assist the collaboration between agents and their clients with the goal of helping them complete smooth and intelligent real estate transactions.

CleanOffer is run by experienced real estate brokers and active home owners. Our rich real-life, real estate experience is what guides us in creating what we do with CleanOffer. Yet, most of our users know little about us and virtually nothing about how we think about real estate. Hence, this new blog is dedicated to:

• Transparency in what we do over here at CleanOffer and why we do it
• Sharing with you our news and our plans
• Soliciting your experience, feedback and ideas
• Discussing real estate industry trends
• Talking about other cool stuff

We think that we do a pretty good job here. Still, we know that not everybody is happy with everything we do. Good or bad, we want your input to this blog. You will be helping your local real estate community. Stay tuned for more…

Here is to a very happy, healthy and prosperous 2008!

David Faudman, CEO/Founder
CleanOffer, Inc.