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Opinion Editorials

The wild west of real estate: a startup story

Most in the real estate industry do not know that the boundaries have not yet been pushed as far as they can go and that some companies are still out creating new frontiers. Real estate is still very much the wild west when it comes to technology.

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Questions about succeeding in real estate

As a startup in the real estate industry and with the overwhelming perception that, at it’s core, this is a broken industry, I am faced with numerous questions about how to be successful. What does it take to rise to the top these days in real estate? With the value proposition of brokerages shrinking, along with their profits, how can you monetize the brokerage value proposition for your clients and yourself?

Should you become an agent to a large regional broker? Should you be a franchise to a big box brand? Should you start your own brokerage? Do you license technology or build it yourself? These are a few of the many questions I have asked myself.

I believe the consumer is entitled to all of the data that is available. Data transparency is key to the most efficient transaction. I set out to start a technology-based brokerage with a new standard of collaboration and efficiency for both the agent and the client. No, this is not a new idea but it is one that I believe is the minority in terms of the real estate brokerage experience.

Setting the stage

I want to be different. I want to be unique. I want to offer my clients a better experience. In Houston, that is a tall order. Why? We have the Houston Association of Realtors (HAR). What is so special about HAR? They are the leading MLS in the country in terms of technology and their consumer facing website. They do an incredible job of providing all the tools a brokerage or agent needs to be successful. What more could you ask for… right?

There is one pitfall. One need ask, is this good or bad? I am of the opinion that while it is good in some respects, it falls short in others. That creates opportunity.

All of the large brokerages in Houston, excluding some national names, have the same experience. They all use the same tools and there is nothing to differentiate one from the next except the agents themselves. Each does a great job and is a pleasure to work with, however, I believe there is more to the process than just the agent. In today’s world of technology and with the Internet, a brokerage has an opportunity to define themselves in other ways than just having good agents. Your sophisticated clients expect more. They are now doing a large part of the process on their own and while they still want and NEED a good agent, they also want the tools to make the most informed decision.

NuHabitat is in the process of developing our own proprietary online experience from the ground up. I could use all the tools available to me as a member of my MLS but I want to establish NuHabitat as a brokerage with the ability to stand on it own two feet. What if we want to grow outside of Houston and there is no HAR? In order to do so, there are many issues to address.

Issue one: data

The first dilemma is how do we get the data and how to have the ability to do with it what we need to give our clients the best information and experience. Due diligence directed me towards a VOW (Virtual Office Website). To my surprise, I didn’t find a good solution in the market so I said, I’ll do it myself. Ambitious… right? Look at Redfin, Zip, Sawbuck and others… all brokerages with their own value proposition. Makes sense to me.

I later found this to be no easy task. Zip is publicly traded and Redfin has raised over $30 million dollars.

Then there are the politics. Who owns the data? Is it the MLS? The brokerage? The agent? I always hear the brokerage. What about the consumer? Seems to me it is their data. The whole transaction starts and ends with the consumer. I think that tends to be forgotten.

Issue two: to VOW or not to VOW?

There are so many issues that surround data in real estate. It is exhausting. IDX, VOW, Syndication. Somebody give me a stick. I don’t think the horse is dead yet. I wont go there as it has been covered ad-nauseam, however, I will comment on VOW since that is my chosen approach.

For those of you who may not know, a VOW is a Virtual Office Website and was the result of the 2008 DOJ vs NAR settlement. In its simplest form, it allows for a brokerage to access and display on their website (once a broker-consumer relationship has been established) all the same data that can be provided to a client in a “bricks & mortar” setting or by any other means of transmission.

Seems to me everyone would do this. Well, not really. The alternative, IDX (Internet Data Exchange), is easier and cheaper. The barrier to VOW can be extremely high with a tremendous expense if you are going to develop your own application from the ground up, but the benefits in today’s marketplace are tremendous. Look at Redfin’s platform. What if you could license it? Would you? Is Redfin a brokerage, or really a technology company with an identity crisis?

It would seem to me that with the never-ending debate about the end of IDX and brokerages pulling their listings or the concern about syndication, VOW would be a no-brainer.

Real estate is still the Wild West

There are a lot of moving parts and I hope I can share my experience first hand and maybe save someone else the aggravation that I deal with while navigating the process of starting a technology focused model in an industry that feels more like the wild west rather than one that represents the single largest asset each of us will probably own.

As the leader of NuHabitat LLC, Jeff brings a unique qualification to the table with 10 years experience of buying and selling homes as a high-end luxury homebuilder while working with clients, agents and brokerages. Motivated by a unique set of circumstances, his goal is to provide a more efficient and economical approach to prospective home buyers and sellers in the modern day world of residential real estate.

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35 Comments

35 Comments

  1. Danny

    March 21, 2012 at 6:34 pm

    Great article Jeff – I couldn’t agree more.

  2. Russ Capper

    March 21, 2012 at 9:41 pm

    Sounds real smart to me. Why don’t more Realtors think this way? If I had a large brokerage, I’d be in touch with Jeff right now….

  3. Jeff Brown

    March 21, 2012 at 11:41 pm

    Hey Jeff — Welcome.

    I’m thinkin’ you’re about to sit down to a plate full of elephant. Like Grandma always said, “One bite at a time.” Are you being ambitious? Duh. Nothin’ worthwhile in business ever got down without it. Best of luck.

  4. Brian

    March 23, 2012 at 7:41 pm

    Jeff,
    I agree it’s time to liberate data and let the consumer see everything they can. If you hide data and restrict access it’s because you fear that you have no value to add. Those days are gone, and Realtors who think that way will go the way of the dinosaur. I look forward to following your progress with NuHabitat… you’re going up against the best MLS site in the country.
    Cheers,
    Brian

  5. Tina Fine

    March 29, 2012 at 6:17 pm

    The data does belong to the consumer!!

  6. Galen Ward

    April 15, 2012 at 11:38 pm

    Jeff, building a great site indeed does take a lot of investment up front, but to be successful, you should plan on ongoing after you launch too.

    I’m exceedingly pleased to see you working to build a web experience that connects with the consumer – I gave a talk called “The End of the Average Brokerage” at RETSO and my advice to the brokers in the room was to embrace the web and to over-invest in making themselves relevant to consumers and in providing real value to consumers.

    Keep us posted on how it goes.

  7. Steve Scott

    May 10, 2012 at 6:33 pm

    Welcome Jeff!

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Opinion Editorials

The secret to self improvement isn’t always about improvements

(EDITORIAL) Self improvement and happiness go hand in hand, but are you getting lost in the mechanics of self improvement?

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fitness happiness

Think back to your New Year’s resolutions. Now that it’s summer, how many of them are you still keeping? Think about which ones stuck and what went by the wayside.

If you’re like most of us, you had big plans to make yourself better but didn’t stay the course. I’ve only managed to keep one of my resolutions, but it isn’t always easy.

I want to take a look at why we can’t keep our goals. I think we’re always on a journey of self-improvement. It’s easy to get obsessed with reading self-help books or trying to learn new things. We want to be better. This spring, I went through a Lent study with a group of people. Lent is a time of growth and self-reflection, just six weeks. And yet many of us are struggling to keep up with the daily reading or maintaining a fast of something we willingly chose to give up.

Why do we fail?

I think we fail because of three things.

You might think I’m going to say something like we fail because we don’t have willpower, but I think that is the farthest thing from the truth. I’m no therapist, but I’ve read the literature on alcohol and drug rehab. It’s not willpower that keeps a person sober. It’s community. One reason I think we fail at our goals is that we don’t have a cheerleading team. I believe that we need people on our side when we’re trying to improve.

Secondly, I think we fail because we want immediate results. We have this mentality that things should happen quickly. I’ve written about this before. It’s like you workout once and want that swimsuit body. We get frustrated when we don’t see results right away. So, we move on to the next pursuit.

Do your goals lead to happiness?

Failure can also be because self-improvement goals don’t always lead to being better person. We do a lot of things because “we should.” Your doctor might think you need to lose weight. Maybe your boss wants you to be a better speaker. Meditation should make you a better person. Maybe you ran a marathon, and now you think you need to run an ultramarathon because that’s what your best friend did.

What makes you happy isn’t always what you should be doing.

Your doctor might be right, but if you’re choosing to lose weight because you want to make your doctor happy, you’re probably not going to stick with a program. If you’re trying to learn Spanish to make your boss happy, again, you’re probably not going to enjoy it enough to really learn. If you’re chasing after goals just to say you’ve done it, what value do your achievements bring to your life?

If you’re obsessed because you “should” do something, you’re going to get burned out and fail. Whether it’s New Year’s resolutions, a self-improvement project or giving up meat for Lent, you need solid reasons for change. And if you give something a try that isn’t for you, don’t soldier on. You don’t need to spend years taking yoga classes if you don’t enjoy it.

When something becomes a burden rather than bringing benefits, maybe it’s time to take a look at why you’re doing it.

When you don’t know why you’re knocking yourself out to be better, maybe you need to figure out a reason. And if you feel as if what you’re doing isn’t enough, stop and figure out what will satisfy you.

I’ve been doing a lot of meal prepping on the weekends. Sometimes, I want to quit. But it pays off because I have less to do throughout the week. It might seem like a burden, but the benefits outweigh the burdens. I’ve been able to eat much healthier and use more vegetables in my meals, which is the one goal I’ve been able to keep. I have some good friends that help me stay on track, too. I choose to eat more vegetables for my health. I think it’s a combination of all these things that is helping me meet my goal this year.

Don’t give up on making yourself a better person. Just don’t become obsessed over the program. Look at the outcome. Are you pursing happiness on a treadmill or are you really working to find happiness?

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Opinion Editorials

What I wish I knew about finances in my 20s

(EDITORIAL) They say money makes the world go round. So, let’s discuss how to be smart with finances before it’s too late.

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finances

Being in my early twenties, something I’m still getting used to is the fact that I’m making my own money. This is not to be confused with the babysitting money I was making 10 years ago.

Twice a month is the same routine: I get my paycheck and think, “Wooo! We goin’ out tonight!” but then I snap back to reality and think about what that money needs to be put towards. The smallest part of it going towards fun.

It’s been tricky to really start learning the ins and outs of finances. So, I do what I usually do in any type of learning process? I ask for advice.

I used to be fixated on asking those more advanced in age than I what they wish they knew when they were my age. Now that I’m determined to learn about finances, that question has been altered.

I reached out to a few professionals I know and trust and they gave me solid feedback to keep in mind about building my finances, about what they wish they had known in their 20s. However, I don’t think this only applies to those just starting out, and may be helpful for all of us.

“It’s important to simply know the value of money,” says human resource expert, Nicole Clark. “I think once you start earning your own money and are responsible for your housing, food, etc. you realize how valuable money is and how important it is to budget appropriately and make sure you’re watching your spending.”

Law firm executive director, Michael John, agrees with Clark’s sentiments. “I wish I had kept the value of saving in mind when I was younger,” explains John. “But, still remembering to balance savings while rewarding yourself and enjoying what your efforts produce.”

There are so many aspects of finance to keep in mind – saving, investing, budgeting, retirement plans, and so on and so forth.

In addition to suggesting to spend less than you make and to pay off your credit card in full each month, Kentucky-based attorney, Christopher Groeschen, explained the importance of a 401k.

“Every employee in America should be contributing everything they can into a 401k every year, up to the current $18,000 maximum per person,” suggests Groeschen.

“401ks present an opportunity for young investors to 1) learn about investing and 2) enter the market through a relatively low-risk vehicle (depending on your allocations),” he observes.

“An additional benefit is that 401ks also allow employees to earn FREE MONEY through employer matches,” he continues. “At the very least, every employee should contribute the amount necessary to earn the employer match (usually up to 4%) otherwise, you are giving up the opportunity to earn FREE MONEY. Earning FREE MONEY from your employer that is TAX FREE is much more important than having an extra Starbucks latte every day.”

Whether we like it or not, money is a core aspect of our daily lives. It should never be the most important thing, but we cannot deny that it is, in fact, an important thing. It’s tricky to learn, but investing in my future has become a priority.

This editorial was first published in May 2018.

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Opinion Editorials

How strong leaders use times of crises to improve their company’s future

(EDITORIAL) We’re months into the COVID-19 crisis, and some leaders are still fumbling through it, while others are quietly safeguarding their company’s future.

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strong leaders

Anthony J. Algmin is the Founder and CEO of Algmin Data Leadership, a company helping business and technology leaders transform their future with data, and author of a new book on data leadership. We asked for his insights on how a strong leader can see their teams, their companies, their people through this global pandemic (and other crises in the future). The following are his own words:

Managers sometimes forget that the people we lead have lives outside of the office. This is true always, but is amplified when a crisis like COVID-19 occurs. We need to remember that our job is to serve our teams, to help them be as aligned and productive as possible in the short and long terms.

Crises are exactly when we need to think about what they might be going through, and realize that the partnership we have with our employees is more than a transaction. If we’ve ever asked our people to make sacrifices, like working over a weekend without extra pay, we should be thinking first about how we can support them through the tough times. When we do right by people when they really need it, they will run through walls again for our organizations when things return to normal.

Let them know it’s okay to breathe and talk about it. In a situation like COVID-19 where everything is disrupted and people are now adjusting to things like working from home, it is naturally going to be difficult and frustrating.

The best advice is to encourage people to turn off the TV and stop frequently checking the news websites. As fast as news is happening, it will not make a difference in what we can control ourselves. Right now most of us know what our day will look like, and nothing that comes out in the news is going to materially change it. If we avoid the noisy inputs, we’ll be much better able to focus and get our brains to stop spinning on things we can’t control.

And this may be the only time I would advocate for more meetings. If you don’t have at least a daily standup with your team, you should. And encourage everyone to have a video-enabled setup if at all possible. We may not be able to be in the same room, but the sense of engagement with video is much greater than audio-only calls.

We also risk spiraling if we think too much about how our companies are struggling, or if our teams cannot achieve what our organizations need to be successful. It’s like the difference in sports between practice and the big game. Normal times are when we game plan, we strategize, and work on our fundamentals. Crises are the time to focus and leave it all on the field.

That said, do not fail to observe and note what works well and where you struggle. If you had problems with data quality or inefficient processes before the crisis, you are not fixing them now. Pull out the duct tape and find a way through it. But later, when the crisis subsides, learn from the experience and get better for next time.

Find a hobby. Anything you can do to clear your head and separate work from the other considerations in your life. We may feel like the weight of the world is on our shoulders, and without a pressure release we will not be able to sustain this level of stress and remain as productive as our teams, businesses, and families need us.

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