Counter Intelligence: The Real Estate Cafe Weblog

Billions in savings: Will real estate consumers extend a helping hand?

It's Christmas 2007, and I am visiting extended family in St. Louis, my beloved boyhood home. Missouri is the "Show Me" state, so it's a fitting setting to ask how much money have real estate consumers really saved since McKinsey & Company predicted that industry restructuring could deliver $30 billion in annual savings ten years ago?

Last week, BusinessWeek's real estate blog, Hot Property, reported that home buyers and sellers paid $55 billion in commissions in 2007, down $13 billion from the peak in 2005. They attributed the decline to falling sales and noted that consumers paid $19 Billion more than 2000 "largely because of the surge in home prices during the boom."

What caught my attention was an estimate that "‘for sale by owner’ sellers saved almost $9 billion in home value that they otherwise would have paid to real estate agents." That figure is just shy of the $10 billion in savings from real estate brokerage commissions predicted by McKinsey & Company in January 1998.

How much more money did home owners save by using a flat-fee MLS listings services in 2007, AND how much more money home buyers receive via real estate rebates?

My guess is that those savings also exceeded $1 billion in 2007, and will grow in the future. As a "Change Agent," my question is whether home buyers and sellers are willing to share some of those savings with charitable causes? (Think "pay-it-forward" meets real estate savings.)

ChangeAgents's goal is to create a voluntary coalition of money-saving real estate business models and to invite their clients to share fraction of their e-commerce savings with local, national, and international causes of their own choice. Here's one example of a "community commission."

If you're part of the new generation of real estate companies delivering billions in savings, or if you're hoping to sell "for sale by owner" or receive a real estate rebate check in 2008, would you like to join our conversation about ePhilanthropy & Cause Marketing in real estate?

Please let us know what about your own dreams for 2008 and a better world.

Bono in Boston to challenge real estate industry to join (Product)RED?

Where is real estate's Steve Jobs? a leading real estate industry guru wrote yesterday, asking who real estate consumers can trust.

IMHO, a single visionary is unlikely to emerge and less likely to transform the trillion dollar real estate industry than the collective actions of like-minded innovators. In the absence of a formal coalition, maybe an outside influence, perhaps a world-class celebrity, can help push the industry past a tipping point. At least that's my hope with Bono's keynote speech tomorrow at the mortgage bankers' conference in Boston.

A Reuters headline says he's simply there to lure mortgage brokers to the event, but it's more likely he's there to challenge the real estate industry to get involved in (product)RED or create their own AIDS related fund raising campaigns. That was the subject of this blog post seven months ago:

Creating a real estate version of (product)RED

Regardless of what Bono says tomorrow, any change agents -- or home buyers and sellers -- who are interested in building a voluntary, industry-wide coalition to help real estate consumers save money AND SAVE LIVES are invited to use these resources as idea starters for their own cause marketing and fund raising ideas:

• ASAP Slideshow
• Social networking site for "change agents"
• Wiki for annual fund-raising events
• Draft pledge campaign for cities or alumni groups

Gates call for "creative capitalism" stirs real estate philanthropy dream

After delivering his challenge today at the Harvard commencement, wonder what Bill Gates would think of the viability and fundraising potential of "Discount brokerages band[ing] together" to raise funds for AIDS orphans?

We can make market forces work better for the poor if we can develop a more creative capitalism—if we can stretch the reach of market forces so that more people can make a profit, or at least make a living, serving people who are suffering from the worst inequities. ...

If we can find approaches that meet the needs of the poor in ways that generate profits for business and votes for politicians, we will have found a sustainable way to reduce inequity in the world.

This task is open-ended. It can never be finished. But a conscious effort to answer this challenge will change the world.

Could start-up funds from the Gates Foundation seed a coalition of money-saving real estate business models, which could collectively capture a fraction of the estimated $30 billion dollars real estate consumers will save annually to save lives?  Here's my own real estate philanthropy dream. What's your response to Gates' call for "creative capitalism?"

Social Justice for Real Estate Dummies

                                                            

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Is it heart breaking or maddening?  There are over 2 million Catholics in Greater Boston (myself included), but apparently that wasn't enough to prevent the cancellation of the 2007 Archdiocesan Social Justice Conference due to low registration.

Compare that to the sale of St. Joseph statues to help sell homes.  Ask any Catholic bookstore in Greater Boston or beyond, and they'll tell you the same thing:  they sell out quickly!  One national web site, www.stjosephstatue.com, has reportedly sold more than 500,000 statues up from 6,000 seven years ago.

Instead of burying St. Joseph statues upside down, why not use his feast day on May 1st to invite thinking Catholics (and others) to reinvent this misguided superstition by creating a more meaningful and appropriate spiritual practice to honor the Patron Saint of Social Justice?

That's what the interactive art project shown in the video above tried to do last year at the 2006 Social Justice Conference in Boston. The tool chest contained 40 empty S.O.S. bottles, one for every million people currently infected with HIV-AIDS, and participants were invited to put a St. Joseph medal into each S.O.S. with a message of their own.

This year, our interactive art project morphed into an online interactive map, which enables you to share your prayers and local devotions to St. Joseph online at St. Joe 2.0: Geography of Faith.  Imagine what would happen if 3.5 million Catholics in eastern Massachusetts honored St. Joseph by donating a fraction of the profit on their home sale or commission rebate check to provide shelter for AIDS orphans. 

If other cities around the nation (or globe) imitated Boston, much like they've adopted our celebration of "First Night, believers and non-believers could raise millions -- maybe even billions -- annually, and donate more money annually to support AIDS orphans than the Gates Foundation or FXB.org, founded by the countess who has adopted the world's AIDS orphans as her cause.

We'd be glad to introduce any church group, organization, or individual homebuyer and seller to the proposed campaign, called ASAP: AIDS Shelter Alliance Partners, through a webinar or a local seminar.  In the meantime, sample ASAP Pledge forms are online to help inspire your own local social justice initiatives.

Creating a real estate version of (Product)RED

As real estate wealth has soared by trillions of dollars annually, the internet has made it possible for agents to realize unprecedented levels of success.  So maybe it shouldn't be a surprise that a lead story last week discussing the book Billion Dollar Agent, asked whether that sales threshold has become the real estate industry's new standard for success. 

Against that rising tide, other real estate innovators have chosen to compete on another measure of their success:  consumer savings.  In fact, a half a dozen who (like The Real Estate Cafe) have surpassed one million dollars in consumer savings were featured at a press conference hosted by the Consumer Federation of America in December 2006.

Could the industry's next measure of success be business models that help homebuyers and sellers save money AND save lives?  What it would take for the real estate industry as a whole or individual innovators to create a real estate version of (Product)RED, the highly visible fund raising campaign for the Global AIDS Fund?  Whether operating independently or from within that campaign, wouldn't donations from moneysaving or traditional real estate business models help (Product)RED turbo-charge it's mission?

To help seed that discussion and build some momentum, The Real Estate Cafe would like to invite billion dollar agents, alternative business models, as well as real estate consumers to begin brainstorming about how they can respond to the AIDS pandemic.  One possible response -- an annual, friendly fund raising campaign for AIDS orphans called "Million Dollar March" -- is described in an earlier blog post, "Building a Real Estate Philanthropy Dream, ASAP."  My hope is that real estate industry and millions of consumers will be inspired by the vision and passion Oprah's recent television special,"Building a Dream," to create and pursue their own philanthropic dreams.  Your ideas and examples of initiatives already underway are invited.

Building a Real Estate Philanthropy Dream, ASAP

For many, March 1st is the unofficial kick-off of the Spring homebuying season, but for The Real Estate Cafe it's even more significant for three reasons:

1.  Twelve years ago today, March 1, 1995, The Real Estate Cafe signed it's original lease at 221 Concord Ave, Cambridge, MA.  With that leap of faith,we became the nation's first internet-based, walk-in housing information center.  At the time, high speed T1 internet connections were rare and no one -- not even real estate agents -- could access the MLS on the internet.

2.  We'd like to use that anniversary to take another leap of faith:  we'd like to invite you to help relaunch the Million Dollar March.  Originally submitted to the MIT Ideas Competition in September 2003, the proposed Million Dollar March is:

A friendly, annual fund raising competition to demonstrate how local communities across the United States and other countries can use real estate related revenues and savings from e-commerce real estate transactions to provide shelter subsidies for AIDS orphans through ASAP:  AIDS Shelter Alliance Partners.

This year we may use innovative collaboration tools like a wiki or SecondLife.com to invite thousands of homebuyers and sellers, as well as real estate innovators, around the country to participate in the campaign by (1) contributing their own ideas, (2) organizing their own local fund raising campaigns, and (3) signing donation pledges (see PledgeBank idea starters below).

Alumni fund raising model
Download ASAPledge_Harvard091906v3.pdf

Citywide fund raising model
Download ASAPledge_City091606v7.pdf

3.  For our part, The Real Estate Cafe is using our 12th anniversary to announce our new menu of fees, our first rate increase in approximately a decade.  But don't let that discourage you:  if you agree to donate 10% of your rebate to non-profit organizations, you can lock into our longstanding rate of $100 per hour.  (A minimum of $1,000 must be distributed to one or more non-profit organizations serving AIDS orphans through ASAP:  AIDS Shelter Alliance Partners / Million Dollar March.)  Why focus on AIDS orphans?  Watch the rebroadcast of Oprah's special "Building a Dream" this Saturday, March 3, or read this blog post on six "megaforces" facing the global community.

Homebuyers: Help map falling prices to protect yourself from overpaying in "overvalued" markets

The map may take a couple seconds to load.

UPDATE: Added wiki-version of national RealEstateBubbleMap.com. Contributors welcome.

A year after The Real Estate Cafe speculated about whether bloggers would help pop the real estate bubble, househunters turned citizen journalists now have the opportunity to use online maps to move past theories and debates, to document price reductions, pre-foreclosure notices, and properties selling for below their assessed value.  This map, for example, shows some of the largest recent savings in Greater Boston.  Interested in using Platial to create real estate bubble maps in "overpriced" housing markets across the nation? Here are three options: 

1.  Register to use Platial so you can add "Places" to the Boston regional map above.  It's easy to add a new property, post comments on an existing one, and upload photos to any Place whether it is yours or not.  Videos and audio clips can be embedded in the descriptions of the Places you add.  To republish this map on your website, click here and simply cut and paste the html. The map can be re-sized to fit any page layout.  Contributions from fellow bubble bloggers and their readers, particularly those in 71 cities called "extremely overvalued" by USA Today are welcome.  Want to correspond with each other and become bubble buddies?  Start by adding your comments to the Boston bubble map or this national map / wiki of overvalued housing markets.

2.  If you want us to do the work, send comments, corrections, or references to other properties asking or selling for (1) below their assessed value or (2) well below their original asking price to [email protected].  Links, photos, videos, and audio clips are welcome, but addresses or intersections are required to map locations.

3.  Create your own local or regional map on Platial, and add or "grab" Places from other maps. Then let others add to or republish your map to create an informal, grassroots network of housing bubble maps.  Sound cool?  That's what others say about Platial: read Wired's article, or listen to a story about the site from NPR's All Things Considered.  Check out the repeated references to Platial and social networking with maps (watch video clip) at the Where 2.0 Conference News site this week. 

What's in it for you?  Post enough new places to your own map, and Platial will share advertising revenue.  Or simply use information others post to stay informed, protect yourself from overpaying for property, or negotiate a lower price by linking your offer to recent sales, price reductions, etc.  Maybe we can even get foundation money to create an initiative to help inform and protect homebuyers like you. 

Meanwhile, if you need a buyer agent in Greater Boston, The Real Estate Cafe would be delighted to serve you and rebate some or all our commission. If you are househunting outside Boston, we'd be delighted to refer you to an exclusive buyer agent -- perhaps one contributing to this map -- and rebate one-third of our referral fee (where allowed by law), and donate another third to the proposed Million Dollar March to help save lives or provide shelter subsidies for AIDS orphans.  With more than 15 million AIDS orphans worldwide, let's use today, Father's Day, to begin brainstorming about how to build a voluntary, nationwide campaign.

Buying or selling this Easter? Help bring someone back to life

$140 per year, or about 38 cents per day—that’s all it costs to keep someone alive now with AIDS medication in developing countries. For another 16 cents per day, you can keep a child alive based on estimates in a recent front page story in the New York Times: Slowly, Africa Starts to Care for AIDS Children.

In contrast, thousands of homeowners across Massachusetts save millions every year by selling their own homes "for sale by owner," and real estate rebates are becoming more common for buyers and sellers according to the Wall Street Journal. So is it unrealistic to talk about raising $1 million dollars between now and World AIDS Day, December 1st, 2006 to provide shelter subsidies for AIDS orphans? That’s the goal of the Million Dollar March. In time, we hope that an industrywide coalition of traditional and new moneysaving real estate businesses join ASAP (AIDS Shelter Alliance Partners) to create a multi-million dollar annual fundraising campaign. Are we dreaming? Not if ASAP can tap into the wealth created by the $2 trillion dollar a year residential real estate industry, and industry changes estimated to deliver $30 billion annually in consumer savings.

To learn how you can maximize your savings now, email [email protected] or call us at 617-661-4046 to schedule a 90 minute slideshow / FREE consultation. If we help you save thousands of dollars by selling your own home or working with a new moneysaving real estate business to buy or sell a home, will you help bring someone back to life this Easter?