Austin Texas Real Estate Blog

NAR makes it rain to the tune of $20MM for the boys at RPR!

I’ll be the first to say that technology can be sexy. Especially, when it’s technology that you wished you had. That kind of thinking makes me wonder if NAR didn’t fall in love with the idea of the REALTOR Property Resource and make a mistake by funding it completely alone.

A luxury once tasted, becomes a necessity. Not sure who coined that, but it’s very true. Use the new iPhone and it’s the next item on the shopping list; buy a GPS and it’s hard to imagine getting around without it. Now put yourself in NAR’s position. There are some awfully talented guys who used to run Cyberhomes. They have been with Fidelity, have been with LPS, and they’re used to selling to REALTORS with sexy looking technology. (LPS is a MLS provider.) Now take these Cyberhomes guys, put them in a room with some REALTORS who run the Association, and the Association’s big fat checkbook and what do you think the outcome will be???

I’m thinking a $20MM company replete with Cyberhomes guys and paid for by Joe and Jane REALTOR. Note that the CEO and a VP are actually brokers, which makes me feel a lot better. Of course, the details are not there for us to see. I mean, sure, there are a few extremely vague agreement drafts floating around there, there are likely some coders integrating data, maybe a few social media evangelists (we met Reggie of RPR in a previous post), and other than that, a whole lot of sealed lips.You can get some great info over at MLS Tesseract if you want to bone up on the current state of RPR. The lack of communication and attempt to get buy in is for some other posts so back to the main thought of this post.

Did NAR fall in love and blow $20 large on RPR? I think they might have.

But why do you think this Joe? Aside from the obvious reasons that we all sell locally (so why do we need a national system) and the fact that the resources they are aggregating are already out there, FOR FREE; Well, I was reading press releases and news stories about the past wonderful experiences that NAR and business partner/related tech companies have had and a few things popped up.

Remember HomeStore.com? Remember the CEO of HomeStore.com who was sentenced to 15 years in a Federal facility for defrauding investors. The outcome, just a little loss of $100 Million dollars to investors and stockholders. No biggie there. I mean it wasn’t Enron and at least NAR wasn’t the sole owner of that baby, who by the way is now called Move.com. Just for your reference that Move stock is now trading at about $1.30 per share down from it’s all time high of something like $102. (Note that Move.com is currently worth less than 70% of LoopNet and less than 50% of CoStar.)

So then I decided to check out what NAR had said about Realtor.com. How was this such a success when HomeStore and Move were disasters less than ideal engagements. Here is what I found interesting that either NAR has forgotten or the fun bunch from Cyberhomes helped them over look. My commentary in blue.

Directly from the Press Release

…
History of REALTOR.com
In November 1996, the Board of Directors of the National Association of REALTORS® approved an agreement between the REALTORS® Information Network (RIN)—NAR’s wholly-owned subsidiary–and RealSelect, Inc. to take over the operations of NAR’s official Internet site, REALTOR.com. At the time, many business models were considered to finance the development of REALTOR.com.

NAR’s Leadership Team decided against using dues dollars or asking for a special assessment of the membership to fund REALTOR.com. While Homestore and its investors have spent hundreds of millions of dollars to build and operate REALTOR.com, no NAR funds or NAR member dues dollars have ever been used for the creation or operation of the site.

Remember the fraud guy and the hundreds of millions of dollars. Seemed like a good idea then. With the current load of fraud ala Madoff, Standford, and the list continues, it SEEMS LIKE A BETTER IDEA NOW.

…

Key Provisions in the Operating Agreement
The operating agreement negotiated more than eight years ago contained a number of important provisions ensuring NAR’s control over the content and operations of the site. Those provisions remain in full force today and continue to guide the relationship between NAR and Homestore (NASDAQ: HOMS), which owns RealSelect.

Homestore operates REALTOR.com as a business. Its separation from NAR allows the company to make decisions that could potentially pose difficult problems for a trade association on business terms. These include the pricing of REALTOR.com products and services to REALTORS® and the development and marketing of new products and services.

Ok. Why has this changed? I mean, I love technology as much as the next guy, but if there aren’t private investors out there willing to provide funding then maybe the NAR shouldn’t step in an fund this start up with member dollars. Are any of the NAR board members technology incubator guys? What about venture capital guys with experience in taking a technology startup from soup to nuts??? I’m sure the guys from Cyberhomes are stoked. “Hey check this Bobby, we got an angel investor and get to play start-up now with other people’s money.” Also, since the exact product offerings are not set in stone, nor are any pricing models for members, what’s the deal here? Before owning the whole enchilada posed difficult problems, now, now sweat.

Outlook for the Future
Homestore has survived the shake-out among dot com start-up companies and complete turnover in its management team. It has undergone major cost-cutting and restructuring to adjust to changing business realities. Certainly, its relationship with NAR has helped see it through challenging times and REALTOR.com has never lost its lead in the real estate space.

The two organizations have continued their relationship essentially unchanged because they both benefit. Homestore has access to the best brand in real estate and NAR has a vehicle to provide its members a strong presence on the Internet without incurring the cost or risk of operating REALTOR.com itself. Time and trials have tested the formula, and now it’s poised for new growth, profitability and service to REALTORS®, shareholders and consumers alike.

…

Um. yeah. If I hadn’t sworn off the blink tag long ago, the middle sentence above would be blinking like John McCain at a presidential debate. Why has the time tested formula been changed? Remember what happened when Coke tried that??

So now you see why I think NAR fell in love with RPR and wrote a fat $20MM check. The past taught us as an association what works, why it works, and leave it to NAR to forget the history only 10-15 years in the rear view. As a NAR member, it saddens me. As a technology guy, it frightens me.

I’d love to hear from other agents, brokers, MLS folks, even some of those tight-lipped RPR people are welcome here. Maybe if we knew more about what was going on some of the skepticism would melt away. That remains to be seen.

According to the Urban Land Institute, Austin is one of the real estate hot spots for 2010 development. Along with Washington, D.C., Boston, San Francisco and New York City, Austin is expected to see a surge in commercial development in coming years; the study indicates that 2010 will be one of the best times to buy, coming as it does at the expected bottom of the cyclical market. For those in a position to acquire real estate at this advantageous time, the return on investment is likely to be exceptionally high; 2010 may well be the year to watch in terms of commercial real estate investments.

Austin’s low rate of state tax and continuing commitment to corporate investment is credited with a large part of its economic stability and potential for growth. Its position as the capital of Texas provides robust support for its local economy, while its highly desirable residential environment has helped to keep housing prices stable during recent housing industry downturns. Austin’s high-tech industrial base also contributes to the overall real estate market stability, ensuring high demand for commercial and residential real estate continues well into the future.

The study also outlines some strategies for commercial real estate investors throughout the U.S. market. One of the most crucial is, of course, to invest in high-growth areas like Austin; this ensures the ability to attract and retain high-quality tenants for commercial properties. Additionally, investors should be highly selective in their choice of properties. Class A properties offer higher quality in materials and manufacture, and therefore represent a better long-term investment than other buildings. Location remains a key element to return on investment; cities like Austin offer investors a much better chance for a high rate of return on their initial investments. The study also recommends sticking to a cash basis for all real estate transactions; this will allow investors to take advantage of exceptional opportunities as they arise. Finally, the Urban Land Institute study recommends patience; by remaining steadfast and purchasing wisely, investors will be set to reap the profits when the commercial real estate rebounds over the coming years.

Austin’s real estate market offers unique advantages to investors and homebuyers. The commercial real estate picture in Austin is already showing signs of recovery, making this an optimal time for investors to jump into the market and take advantage of current low prices. Austin’s combination of desirable residential areas and robust economic growth makes it the perfect arena for commercial real estate investment in today’s market.

Choose Austin for college and your piggy banks will be happy

A recent survey has good news for those living in college towns like Austin. The annual Coldwell Banker College Home Price Comparison Index listed Austin as the 59th most affordable college market in the United States, making it even more desirable for home buyers and investors. Real estate professionals have long been aware of the advantages of buying in a college town; typically, these markets offer long-term stability, high demand, and a wider range of services and local businesses than other comparable metropolitan communities.

College towns in the Midwest offered the best bargains with average home prices starting at $121,885, while the West Coast was priced out of reach for most with the highest average prices topping out at $1,489,726. Austin is competitive with a 2009 average price of $226,642, making it a very affordable real estate market for first-time buyers and investors alike. In comparison to other U.S. cities, Austin has escaped the brunt of the recent housing industry problems, making it even more desirable to real estate buyers.

Those of us who already live in Austin are well aware of the benefits this college town provides to its residents. Beautiful views, an extensive park system, world-class dining and down-home barbecue are only a few of the unique advantages of living in Austin. Because Austin is the capital city of Texas as well as the home of the University of Texas at Austin, the presence of both the government and higher education sector provides additional services and benefits to residents that might not exist without their support. Austin adds to these advantages a vibrant, growing local economy that has its roots in the high tech and medical sectors, ensuring its residents have access to cutting-edge health care services and the latest advances in medicine and technology.

Austin’s college town status and stable economic conditions have made it a desirable location for real estate investment; homes in Austin have retained their value remarkably well during the recent housing industry slump. Demand remains high, spurred in part by the constant need of college students for housing and the overall desirability of Austin communities. Austin’s position as one of the greenest cities in America also attracts buyers and investors, ensuring the housing market has a stable base and that home values remain high. As the national economic situation continues to improve, it seems likely that Austin will continue to reap the benefits of its status not only as a college town, but as one of the best places to live in all of the United States.

Asset protection is a term many home owners are well aware of, however first time home owners often know little about. Asset protection is the insurance designed to help protect your real estate and the assets within your home, in the event of unexpected emergency. Often this focuses on financial disasters, however, it is not limited there to. In the end, it is the asset protection that assures the value of the property regardless of the unexpected.

Old time asset protection

When you begin your investigation into asset protection you will need to investigate all possible options. Once you have reviewed the benefits of each option and settled on a plan there will be an assessment done on your home. The insurance company will also asses the demographics of your area. From there they will combine the results and provide an estimate of how much protection is available to you and your home. The agent will take the time to explain the programs they have available and how to select one. Discuss this with your real estate attorney prior to signing the documents.

The final protection will be defined by the state and counties laws in the area. Typically, retirement and disability benefits are not included as part of the protection, however in very unique circumstances it could be made possible. Personal items, such as jewelry, clothing and furniture are also not covered as part of this umbrella; however some states allow a percentage of these assets to be covered.

To assure what you own receives the best coverage when it is needed most, then your hunt for real estate shouldn’t include just loan and house hunting. The search needs to also include your asset protection evaluation. Protect what you have and you will find it is there for years to come.

When you are shopping for your home, you need to do everything you can to assure the best results for your investment. One crucial area in your new home search that should never be overlooked is your home inspector. The home inspector should be a valued and treasured member of your home buying team. Just like your real estate agent, the home inspector will provide you with the best knowledge available regarding your choice.

Before contracts are signed, and a home is purchased the home inspector will review the house and clearly identify any issues big or small that can cause trouble down the road. This arms you with knowledge at the bargaining table. If you find that you are going to repair part of the roof after you move in, you can negotiate that into the purchase of the home. This also allows you to know if your investment is worth what the appraiser anticipates it to be at.

Most agents have an inspector they will contract with, however you are not limited to their inspector. You can take the time needed to find someone who can and will contract with you to inspect your home, or home choices. You need to be assured your home inspector is looking out for you, so selecting your own will empower this for both you and the inspector. This avoids any potential surprises or undesirable replacements after move in.

Working with your home inspector is an essential aspect of buying your new home. They help in defining the home’s quality, and assuring you are getting the best deal in the end. Prior to signing your contract, make sure that each person on your home buying team, including your home inspector, has had the opportunity to review the documents. This will help to make your new home a wonderful experience.

Invest in Commercial or Residential properties.

There are a lot of decisions that must be made when investing in Real Estate properties. Each property Investment will have its own unique requirements and conditions. Therefore, strategic planning is of the utmost importance.

Some of the issues you will have to consider before planning are your budget, and financing. Knowing what your budget will allow will guide you to the kinds of investment options that will qualify as a viable plan.

There are two initial investments in which you will have to decide. The investment is to either go with commercial properties, or to go with residential properties. Each property investment, whether commercial or residential, will have a unique subset of requirements, regulations, zoning laws, tax requirements, and the list goes on.

Residential real estate properties offer two choices in the type of residential investment property you choose to make: single family dwellings or multi-family dwellings. The single family dwelling is a detached home zoned for a single family to occupy. Another single family investment dwelling is a townhouse which is defined as, a luxurious house in a large city occupied entirely by one family, or one of a row of houses joined by common sidewalls. They are subject to the occupant board to address common living areas and subject to maintenance costs.

Multi-family dwellings range from a duplex to condominiums. The duplex is defined as a house having separate apartments for two families. An example of this is a two-story house having a complete apartment on each floor and two separate entrances.

Condominiums can be either commercial or residential properties and are defined as: an apartment house, office building, or other multiple-unit complex, the units of which are individually owned, each owner receiving a recordable deed to the individual unit purchased, including the right to sell, mortgage, etc., that unit and sharing in joint ownership of any common grounds, and passageways. They are subject to the occupant board to address common living areas and subject to maintenance costs.

Commercial Real Estate properties can be designed to be whatever the renter/leaser requires. Wikipedia defines Commercial property as including office buildings, industrial property, medical centers, hotels, malls, retail stores, shopping centers, farm land, multifamily housing buildings, warehouses, garages, and industrial properties.

Whatever investment you decide to go with it is always a good idea to check with a professional opinion from an industry specialist such as Joe Cline, real estate agent.

When someone is looking for a second home, either as a vacation home or an investment property, the motivation and influencing factors are very different than that from a first home buyer. This is more valid in today’s buyers market.

The National Association of Realtors (NAR) released a report that showed vacation home sales dropped a whopping 30 plus percent in 2008. It appears to have parallel reasons compared to the primary residence market. The sales came within the deeply distressed, deeply discounted home market. The median price of a vacation home fell as far down at 150 thousand dollars across the country. Of those who did settle on the second home purchase, the vast majority planned to use the second home for themselves. This means that people are still looking for second homes and are financing them.

Even with the declining numbers, there are significant pluses to this. The housing market is poised for growth again, especially in the Austin area. This also means as people are looking to sell their home, they have two potential markets to target. Growth options continue to be opened, making the housing market more viable.
Now is the time to buy, and sellers are getting more attention.

Does your home need a remodel? Most homes don’t need a full remodel before going on the market, but there are some things that you can do before you market your home that will increase the overall value. Some of these suggestions are simple and easy to do, and will make a big difference when it is time to sell your home.

1 – Paint outside and inside.

Over time the color of paint loses it luster and vibrancy. A simple re-coat can significantly brighten a home, and clean away any wear and tear that might be visible. Along with the time it takes to lose it color, the color choices may have fallen ‘out of style’ and thus may lessen the value of your home. By reviewing you color selection and updating as needed, you are able to maintain or improve your home’s overall value.

2 – Tile your home

Tile is both durable and easy to maintain. This couple will enable your home to be the best and most comfortable possible for all who will visit, and perhaps to new home buyers. Carpet wears over time, and can diminish a home’s appearance significantly. The change from one to the other can be done easily and far more inexpensively than most people may anticipate. Often it costs the same as or less than laying down new carpet.

3 – Install exterior shutters around the windows.

Although this is a purely cosmetic appeal, it significantly improves your home’s look and feel. Numerous surveys and studies have been done and something as simple as wooden shutters make a home feel more cozy and comfortable, which would make the home both more appealing to new buyers and easy to transition into.

These are only 3 of the most basic options available to you. They can be done with little extra expense. If you would like to improve for a more lasting and complete package, hiring a home inspector would be the best next step. He or she would be able to give you a complete picture and guide you to the best points to focus on. You can check the cost vs value report to see how much you will expect to see back for each remodel.

Found in my pile of magazines and folder of e-newsletters:

§ § § § § § § § § §

Apartment REIT Stocks Fall to Five-Year Lows
Industry is hurting, but not as badly as other commercial sectors.
The stock market is falling to levels not seen since 1997-and apartment REITs are not immune. A number of leading firms-BRE Properties in San Francisco, Chicago-based Equity Residential, Apartment Investment and Management Co. in Denver, Essex Property Trust in Palo Alto, Calif., and AvalonBay Communities in Alexandria, Va.-have all seen their stock values plummet to five-year lows.

Read the full story at Multifamily Executive.

§ § § § § § § § § §

UL begins certification of green products
January 14, 2009
Building Design and Construction
Underwriters Laboratories, the 114-year-old organization known for consumer product safety testing, has begin offering assessment and certification of environmental product claims.

UL’s two new programs launched in January 2009.

“The question of what’s green and what’s not green is being asked more and more,” Christopher R. Nelson, UL’s director for corporate development, said at Greenbuild in Boston.

“UL consumers really have been asking us how do you fit into this space, they look to UL for credibility, and retailers have been asking us (the same questions) as well.”

Get the complete details from Building Design and Construction.

§ § § § § § § § § §

Currently, you are a buyer. You are operating from the point of view of someone who wants to obtain property. As such, you have located a real estate agent, conducted research on quality areas with even more quality prices and toured several homes. You’ve seen many that you wouldn’t mind living in, which if your ultimate goal, would be wonderful, but it’s not. You aren’t looking for a house to become a home; you are looking for a house that can become a profit. You want to resell.

You must then find a piece of property with resale value. It cannot simply seem like a place you would live in or appear to have multitudes of potential. It has to have potential. It has to be able to appeal to others, and others aren’t you. Therefore, don’t get caught up in the perks that you fall for, such as views or quaint external decorations. Focus on what will truly sell:

•Landscape – A house’s appeal doesn’t exist solely in the house. The yard is important, too. It should be of a decent size and normal shape with, if not actual, the possibility of gardens, playgrounds and other valuable additions.
•Size – You do not want a house six times bigger than its neighbors or ten times smaller either. You want one that although not an exact replica of the ones around it, fits in with the aesthetics of the area.
•Rooms – The number of bedrooms and bathrooms, and the size of the kitchen, as well as the closet space, garage area and appliances in a house will affect the sale. Talk to a real estate agent to determine what is the most popular in the market, and then look for it.

You may be buying right now, but soon you’ll be selling. Talk to your real estate agent, and think like a buyer and a seller. In the end you’ll have success . . . and profit.