I was recently asked by a client to write a blog post about the advantages of using interactive infographics instead of static monthly reports.  Given that there's nothing client-specific about what I wrote, I thought it was good information to share to a wider audience. So this is what I wrote...

             Have you ever heard the phrase “data is the new currency?”  In terms of real estate, that concept is more important now than ever.  As agents are being forced to show their value to the consumer, the power of data will give them the upper hand.  And having the most current, reliable market statistics in an easy-to-use, interactive platform is the key to accessing that power.

            But what does “interactive” mean?  An interactive platform obtains data or commands from a user and gives immediate results or updated information.  In the Domus Analytics dashboards, those “commands” are the filters chosen by the user to show the performance of a specific housing market.  The market in question can be as simple as a geographic area, or as complex as homes of a certain size built in a distinct time period on the waterfront within a limited price range, for example.  An agent looking for the simple market described might be able to find a static report with that information.  But as soon as their client wants to dive into the more complex market, that requires engagement with an interactive platform.  With 12 standard filters, over 2 dozen metrics, and 5 different chart types in Market Insights, there are so many permutations of analysis available that there’s no way a static report can compete.

With NAR just around the corner, you may be planning on visiting the vendor Expo.  Whether you're exploring options to replace an existing vendor, or you just like to keep abreast of current trends, there are several things you should keep in mind.  In no particular order...

1. Length of Time in Business:  Approximately 20% of small businesses fail in their first year.  It usually takes another couple of years to become profitable, or at least breaking even.  Even so, 45% of business fail within the first 5 years.  Those aren't great odds.  In real estate especially, those percentages feel even higher.  It's no wonder that hardly anyone would talk to us when we first started marketing our product.  Why risk choosing a new vendor who might be gone in a few years?  There are lots of reasons for that level of churn.  Some vendors aren't prepared for the extremely long sales cycle; some vendors have a good idea but fail to execute; in either case, they run out of money.  Other vendors are quickly acquired by larger companies, leaving their clients in a contract with a company they didn't anticipate doing business with.  Whatever the case, decision makers need to balance the risks of engaging with a new business against the potential benefit of having the "newest" or "prettiest" technology.
   
2. Financial Ownership & Stability:  Who owns the company with whom you're speaking, and how is it funded?  Is it privately-owned?  Is it corporate owned?  It may even be "owned" by a conglomerate of MLSs these days.  Is it self-funded, debt-financed or backed by venture capital?  It's important to know where the money came from, because that drives the business goals.  If it's debt-financed, the company is on a payback schedule to meet those liabilities, although the debtor has no inherent control over the company.  A self-funded company (e.g. selling stock rather than taking on loans to fund operation) may or may not have a certain runway to turn a profit, but has no outsiders controlling the direction of the company.   A company funded by capital investment has a certain length of time to meet the financial goals of the investors.  For those companies, making the sale and closing the deal is the primary goal.  And in today's environment where capital is drying up, there is no more money to go around if those goals aren't met.  Companies more likely to be around for the long haul are the ones that are already successful, with their operations paid for with existing revenue, and not reliant on future growth targets to remain in business.
3. Quality & Maturity of the Product:  If you've never heard Jerry Orbach sing Razzle Dazzle, take a listen before you walk the Expo floor.  Then ask yourself if you're being shown a flashy, curated demo, or actual product deployments for real customers?  One of those is a more reliable way to evaluate technology.  Ask to see several customer deployments, too.  Many a pretty demo results in a signature on the dotted line, but it's what comes afterwards that matters.  Is the product actually built and running in production, or are there a lot of features still in development?  It's a concept known as "hyper growth" in Silicon Valley, where the proof of concept is built quickly, but the  engineering resources to build what was promised in the sales cycle aren't allocated until the deal is closed.  As a side note, growing too fast like this is widely cited as another reason why businesses fail (lookin' at you, Webvan).  The moral of the story is don't get distracted by "bling".  If you're reviewing actual customer deployments, you'll get a much better idea of what's in store for you.
   
4. Recommendations:  While we're talking about actual deployments, let's talk about recommendations from actual customers.  Get lots of them!  You wouldn't dare hire an employee without lots of positive recommendations, so why would you choose a vendor without the same level of due diligence?  I'm not talking about marketing materials with quotes on them.  With AI taking over the world, I wouldn't rely on video testimonials, either.  Just pick up the phone and call your colleagues at other MLSs or Associations.  Ask about their experience with various vendors.  Ask why they were chosen.  Ask about the ongoing relationship and service delivery.  Ask all the questions.
5. Price:  You're probably rolling your eyes right now, but keep reading.  Of course you're going to consider the price!  But price is important not just because you don't want to pay too much, but paying too little can also be a problem.  Remember the saying "if you aren't the customer, you're the product"?  If you're getting something for free, you aren't the customer.  Ask yourself what that company is getting that makes it worth it for them to give you the product for free.  Maybe it's your data, maybe it the ability to use your name in their marketing.  Whatever it is, they're getting something.  Yes, this includes all the cheap or "freemium" models out there that upsell to your users.  In that case, your users are the customers - you (the MLS or Association), are just a pass-through at best.  So think of price not only in terms of raw numbers, but in the value you're getting for that price.  A cheap product with zero support and no ongoing development is far more expensive in the long run than a more expensive product with excellent service and a reputation for quality delivery. 

We've been a vendor in the real estate industry for over a decade now.  We serve groups across the country, from individual agents up to the large Associations and MLSs.  Other than our unnatural love for Open Houses, this past summer was the first opportunity we've had to experience being on the client side of real estate since we bought our own house almost 20 years ago.  

Last summer, we commenced the process of selling my in-law's home in Pennsylvania.  It was a small house they built in the 80's, and spent most every summer there for the past several decades.  The description on the flyer called it "cute as a button", and it was.  It had a very cabin-like feel.  But it hadn't been updated since it was built.  And like many homes inhabited by elderly adults, a lot of the maintenance had been neglected.  In other words, we knew there was some work that needed to be done.  We considered selling it as-is, but decided that a small investment could do wonders and make a really nice vacation property or starter home for someone.  Plus with the market as crazy as it was, we figured we'd more than make up for it.

The biggest issue we had was that we live in Nevada, and as business owners we didn't exactly have time to manage the process ourselves from across the country.  We needed an agent who knew the area, knew all the contractors, and one who we could trust to get it all done.  That agent was Kim Mills of Coldwell Banker Realty.   If you visit Kim's webpage, her tagline is "Service...it makes The Difference!", and it perfectly describes her.  

When we chose her to list the property, we knew we had a roof leak, and we thought that was the biggest problem.  She suggested coordinating with the homeowner's insurance, and it turned out a large portion of the cost was covered.  Hooray!  We then decided to get a full inspection so we could proactively fix anything else that might prevent the house from smoothly going to close.  It went downhill from there.  There were a handful of "not-up-to-code" issues, from minor things like GFCI outlets to the major structural issue that required the second story deck to be completely rebuilt.  The roof guys removed some wallboard during their repair and discovered mold.  The septic guys discovered intrusive tree roots and we almost needed to replace the whole system.  And let's not forget about the basketball size wasp's nest inside the wall.  If you've seen the movie "The Money Pit", that was this house.  Kim was there for all of it.  Coordinating, giving suggestions, offering solutions, and just being an all-around superhero.  

I don't know what we would have done without her managing the process.   And in our opinion, she didn't make nearly enough money for the amount of time and effort she invested.  If we had to pay Kim by the hour for all the work she did, I'm certain she would have made far more than her contracted compensation.  For better or for worse, that's not how this industry works.  As her client, I'm sad that she didn't make more from our listing.  But as a business owner, referrals are gold.  So this blog and the subsequent email campaign we'll send out to the many contacts in our CRM system is our additional payment to Kim.  If we were the stats vendor in her market, we would build her a custom branded dashboard to use in her marketing, too, but this will have to do for now.

There are a lot of things changing quickly in the real estate world these days.  In a world where iBuyers and online portals are trying to disrupt and take over the industry, agents who differentiate themselves through their quality service will continue to thrive, like Kim.  

Thank you Kim.

One of the questions potential clients ask us is "do you have polygon maps?", and the answer is no.  For some groups, that's a must-have on their vendor evaluation checklist, and that's a mistake.  While polygon selects can be a great tool for helping a client search for a home, they too often come up short for market statistics.  I thought I'd use our recent home shopping experience to illustrate this point.

We're what you might call "regular home shoppers".  That is, we aren't actively looking for a new home, but we love open houses, and if we ever happen upon the perfect house then we just might buy it.  We've found three houses this way in the last 10 years.  The first one was just out of our budget, and the second house was already under contract by the time we saw it.  We found the third house a few weeks ago.  We ultimately decided it wasn't exactly the right house for us, but it was that experience that crystalized our position against using polygons for market analysis and statistics.

Here's how it went down.  During a lengthy chat with the listing agent, she offered to create a comp analysis for our current residence in case selling was a contingency for us to make an offer.  To give you some background, there are 3 neighborhoods right next to each other where we live.  The listing agent's primary business is in one of those neighborhoods, the house we looked at was in the second neighborhood, and our home is in the third.  These are not subdivisions of different builders that no one but the owners can tell apart - these are three very distinct neighborhoods with very different pricing.  It is very obvious, especially to the agent who works in one of them ALL THE TIME, where each neighborhood starts and ends.  However, the MLS doesn't capture neighborhood data, so the agent pulled comps for us using a polygon map.  Unfortunately, the map she drew accidentally included a street in her primary (and much higher priced) neighborhood, dramatically skewing the results and making the comp analysis useless.

Now you may be saying "it was a mistake, just redraw the map."  But that's the whole point.  It should have been trivially easy for an agent who was an expert in our area to draw the map correctly.  If she can't get it right--an experienced agent who knows the area incredibly well--what hope is there for an agent who isn't as well versed in this side of town or technologically savvy?  They may seem cool and powerful on the surface, but from a technical perspective, polygon maps are a lazy work-around for incomplete data management.  Don't let the razzle dazzle fool you - the MLS platforms are responsible for maintaining quality, persistent, useable data that can be consumed by all agents.  We've lived in our house for 18 years, and our neighborhood hasn't changed one street in that time--why make every agent draw a polygon every time they want to analyze the neighborhood?  That local, specific knowledge should be defined once in the MLS and made available to all agents.  Polygons force agents to execute a low-value manual step that is unnecessarily complex, repetitive, and time-consuming, which is obviously prone to errors.

So we got this email...

It all started with a client email, as these things tend to do.  Bob Bemis, the MLS Director of the Park City Board of REALTORS®, sent out one of his well-done weekly market reports.  Bob has a long MLS history, and he's a big data nerd like us.  His report was titled "The Law of Unintended Consequences", and he examined how New Construction contracts were impacting Days on Market (DOM).  Coincidentally, we'd been talking a lot about DOM internally, as you'll see in the next few blogs, so we reached out to chat.  Here's a summary of what Bob wrote:

Part of the Clear Cooperation policy adopted last year requires developments to report their Pending listings when they go under contract, even if the specific units being purchased were not listed.  (Developers typically put in just a sampling of models as listings but have more inventory to sell than what appears in the MLS.)  Thanks to the developers that are doing just that, we are seeing a growing number of listings being Added and Pended on the same day.  But the DOM and CDOM averages are thrown way off because of these entries.  In just the past week, 23% of all Pendings were 0 or 1 DOM.  Agents should look at those averages closely, and look at the underlying data when doing a market analysis where such new developments are prevalent.  DOM and CDOM are likely very inaccurate as a result.

Based on our discussions and Bob's additional insight, we said "What do you think about excluding New Construction 0 DOM listings from DOM calculations?"  While it turned out to be a simple adjustment, the analysis showed us a lot more than just 0 DOM listings making their impact on the calculations.

New Construction and DOM

Conclusion

Five weeks ago, I had a major surgery.  I was physically down for the count for about a week, and mentally fuzzy for at least a week after that.  Honestly, I wasn't mentally focused or engaged for several weeks before the surgery either.  This is blog-worthy because we run a small business!  While Ed and I both "know" everything needed to run the business, we still have a general division of who does what.  But after the recent "This is not a Test" of our emergency business operations, Ed knows a little more than he used to. A little more, but not much, and that's a good thing!

Let me back up.  As a small business, a common concern among prospective clients is how can a small number of people do all of the work?  Said in other ways: who runs the business when we go on vacation or someone gets sick, how can you manage the ongoing workload, how well will the product/service scale, will there be continuous technology updates; you get the picture.  There are a lot answers to this, including the fact that we have a large number of consultants with whom we've worked in the past, and can hire at will as needed.  But more important than that is the effort we've put into automation, documentation, and disaster planning.

So what is Disaster Planning?  Well, when Ed started this as a side business, disaster planning meant grabbing the desktop computer when we evacuated our home for a forest fire.  Literally, that happened.  And now you know how we became a cloud-based company!  So when our house does burn down, we'll have to order more corporate swag, but the business itself all lives online.  That was especially convenient when I may or may not have spilled a bottle of water on my work laptop.  This also allows us to connect and work from anywhere.  Conferences, airplanes, vacations, all those places we don't actually go to right now.  But we can, and that's the important part.  We also have recovery plans for all of our online services, like what happens if our AWS server crashes?  It won't, but we're prepared to restore or rebuild quickly if it ever did.

Automation is something I've talked about before, but it's a great thing to review frequently.  Automation saves time in the long term and allows scalability.  In the "side business" days, it took Ed 2 days every month to build stats for one client. At that rate, he could only manage 2.5 clients a week, and that would be the only thing he could do.  Certainly not a sustainable business model.  When we decided to do this full time, the ability to automate was a huge part of that decision, and figuring out to what automate was the real key.  We started, not surprisingly, by reviewing what consumed the most amount of time.  After that came the "what do I really hate doing" discussion.  The final piece of our automation puzzle is one that doesn't get a lot of attention but really does have an impact - finding the tasks where you don't add additional value.  One example for me was manually sending invoices each month.  Not hard, not time consuming, but easily automated.  We'd much rather spend our time building new product features.

Documentation is the last (or first) step of the work we do.  When Ed works, he opens a blank document and takes notes on everything he's doing. Those notes eventually become the documentation of what he did, how he did it, how to replicate it, and any issues he solved along the way.  When I work, I like to figure things out first and then write up what I did afterwards.  We'll often give our documents to each other and say "go do this thing using my document as your instructions". 

So how does all this relate to me having surgery?  First, all of the automating of our business processes meant there were only a handful of things that Ed even needed to think about or manage.  He didn't need to frantically learn a whole bunch of stuff for which I was generally responsible. He had access to all of the documentation I had written explaining those things on our online server. He had access to all the technical systems, project tasks and statuses, and more. He could even monitor my corporate email for issues that couldn't wait for my return.  Yes, it helped that this all happened over the holidays when work slows down anyway, but there was still work that had to be done.  Like monitoring the data loads, cause data is kind of important to our business.  And he did it.  Not a single client or prospective client was even aware that there was a problem because, from a business standpoint, there wasn't.  And that was a big success.

This concludes our test of the emergency business operations system. 

As we approach election day, I'm not here to try to sway you politically in one direction or the other.  The majority of voters have already made up their mind anyway. What I'd like to share is what we believe is at the root of much of the divisiveness in our country today, and how that can be mitigated in the future - it's the way we vote.

The US is predominantly a 2 political party system.  The 2 main parties have won every presidential election since 1852, and controlled Congress since at least 1856.  Interestingly, the founding fathers were actually opposed to political parties, but I digress.  (Wikipedia has all the details for the super nerdy who want to read further on that.)

Let's use an example.  We're having pizza for dinner, and I want a pesto garlic alfredo ricotta sausage pizza.  My "other half" is desperate for a pineapple and Canadian bacon pizza.  You can see the problem.  We take pizza very seriously in this household, and things are about to get really heated.  So we call all our friends and ask them to weigh in on both choices, and the majority will win.  This is choice that we will forever be divided on, and the loser will be angry for a long time.  Sound familiar?  It should, because this is basically how our elections work today, often called "first past the post" or "winner-take-all" voting. 

But there's another way we can do this.  Let's say I still want my delicious pizza, and the other one still wants his weird pizza, but we'd both be okay with a pepperoni pizza. This time when we vote, we each rank our choices.  I rank my pizza #1, pepperoni pizza #2, and that other monstrosity #3.  The other member of the household ranks his pizza #1, pepperoni pizza #2, and my pizza #3.  Even though the pepperoni pizza was ranked #2 in both cases, it ended up with the majority!  Although neither one of us got our top choice, we're both happy with the outcome because we still get pizza for dinner.  See how much better that is?

Yes, I over-simplified, as there are many ways of calculating rank choice voting.  There's a lot of great info out there if you want to read more about it.  Maine will be the first state in the US to use rank choice voting in a presidential election next month, so we'll be watching them closely to see their results.  Massachusetts and Alaska have questions on their ballot this year that could move them to rank choice voting for state elections.  There are also several municipalities across the US using this system today, with more moving in that direction.  This methodology has been gaining more support over time, so you can expect to see it come up again and again.

The data supports the fact that even if you can't give everyone their first choice, there are often other options that people are okay with.  This has lead to less division and less partisanship where it's used - both things I think we all wish there was a little less of these days.

 GO VOTE!!!

We've been busy 'round these parts, as you may have guessed by our neglect of the blog.  But now that the kids are back in school (and by that I mean still at home ALL THE TIME but forced to login and learn during the day), it's quiet enough to get back to writing again.  So here I am!  And I thought I'd take this post to introduce you to the Domus APM.

What's an APM?  Imagine a fusion between an AVM and an API, and it's nothing like that. APM stands for Amy's Perfect Margarita, and I share it with you now. No copyright, no licensing fee, just your promise that you'll enjoy it.  Bonus points if you drink it with a side of chips and guacamole.

In a blender, start with 10 oz of margarita mix. We're Costco shoppers, so I use their mix.  But I haven't found a mix I don't like so whatever you have at home is probably fine.  Add 4 oz of tequila.  Again, I go with the Costco brand, but use the Anejo, not the Silver.  The Anejo is a much smoother drink, especially if you plan on doing shots occasionally.  I've tried lots of tequilas, and I always come back to this one, especially because it's such a great price.  I tried one that came in a beautiful heart shaped bottle and it was like drinking sewer water.  I really wanted to like the brand formerly owned by George Clooney, and that one disappointed as well.  But you do you, because a lot of flaws can be covered up in a mixed drink.  Add 2 oz Triple Sec.  I don't have a favorite brand, yet.  Now here's the secret, add frozen strawberries up to the top of the liquid and blend.  There's no ice to melt as you drink so it never getting watered down.  Frozen peaches also work really well.

Now that you know the secret, go forth and partake of the blended goodness, you deserve it.  And I'll likely get back to the data and chart chat next time.

The Real Estate Market is still being impacted by COVID-19, but not necessarily in the way we all thought it would be.  We are delivering an educational webinar for staff and leadership on how to the pandemic is affecting the market today.  This is a vendor-neutral, market-neutral, 30-minute online meeting. No matter what solution you use, these tips will apply to all tools. 

Outline for the second session:

·  Prices remain steady or rising in most markets.

·  Inventory is squeezing even tighter than it has been!

·  What to look for next and when.

Wednesday, July 15th @1pm PST