The Science of Real Estate and the 44-Pound Cat

Redfin was on Good Morning America today, as promised. The interview was, as always, a blast, and being in a studio was as strange as ever. For some reason, I kept thinking of the children’s book author I had met in a green room on a previous trip. He had written a beautiful little book, and had nothing to worry about. Real estate by comparison seemed so complicated and mercenary.

But then again nothing can make you feel how infinitely varied and desultory life can be like morning television. The star of today’s show was a 44-pound cat, which had entered the building on a red carpet, with ABC interns posing as paparazzi. Competition between the morning programs for the cat interview had, I was told, been fierce. In the green room, the cat tucked into the small feast that been laid out for him.

Diane Sawyer’s producer came in, and looking down at the grazing animal with a mixture of disgust and what may have been wistful envy, asked if the cat had “like, an endocrine problem.” The cat’s handlers, a group of funny Jersey ladies,  said, “let’s not go there.”

Barbara Walters came through the studio in a magnificent King-of-the-Mountains-style dress, walking gingerly, with delicate eyelashes and a well-muscled man in a very tight shirt and bleach-blonde hair carrying her purse, to air an interview with Carla Bruni. I’ve been watching her since childhood, and wish I had said hello. It was strange to hear her talking so matter-of-factly about Carla’s orgies. I was interviewed by Diane Sawyer, whose youthful relationship with Henry Kissinger I had also just read about, awestruck.

We ploughed through some questions around some real estate science we’re publishing next week, remembering the advice “not to get into it” with any of the nuances and qualifications we would have dearly loved to make.  As soon as the segment was over, the producers swooped in to escort Ms. Sawyer to Bryant Park, filled with teenage girls and already a little sticky with heat, for a production of Rent and a Jonas Brothers concert.

Earlier in the day, I’d asked, “Who’re the Jonas Brothers?” The entire green room fell into shocked silence.

“Dude,” the producer said, apparently having never struggled with the sense of scale that any visitor to New York’s big stage immediately gropes for. “They’re huge.”

Discussion

  • http://blog.FranklyRealty.com Frank LLosa-Broker FranklyRealty.com

    Hey Glenn,

    Next time let’s give the TV shows a great debate.

    The Scientist vs the Artist.

    I would LOVE to take on your science of real estate stats.

    Great marketing (is that an art), but not great science (in my opinion).

    And as a normal defender of Redfin, you will
    know that this isn’t just typical Redfin bashing (by other Realtors).

    1) Your link to the science lab is broken (missing http).

    2) Listing on Friday is the best day?

    I strongly disagree. You say that Thursday is the worst? What do your stats say about the % of people that find out about NEW homes via emails alerts? I would say 80% do.

    What happens if you list on Friday and the alerts go out at midnight (like many do)? A decent percent will get their emails sent to their work email (people love to spend hours at work surfing for homes) on Saturday. That is no good.

    So it sits and gets opened on Monday (your Redfin alerts should tell you the % that open on what day)

    So I still say that Wed night or Thursday is the best day. You don’t want to do it too early since you want to create an excitement around the first open and try and snag 2 buyers.

    I do agree that more people search on Friday, but the serious buyers use alerts, and they need to know BEFORE Friday.

    3) Your “what to offer the buyer agent.” That needs to be looked at more closely. By an artist. You say that those that offer LESS to buyer agents get 99.9% of list price on average. Please send me that EXCEL spreadsheet. On the one hand I CAN see this happening with bank deals, since they tend to offer less to buyer agents and sometimes they under price and get bid over list, but that wouldn’t make sense with the extra 30% DOM.

    I do agree artistically with your science that bonuses don’t work. They tend to be overpriced listings that try to bribe the agents. Eventually they break down and drop drop drop.

    I tried doing my own analysis on the 2.5% buyer agent fee and 3% fee, and I couldn’t find anything conclusive. Instead I know how agents are, and how many are weekend warriors and a 20% pay cut very well could demotivate a buyer agent.

    3) On the “price within the price brackets” I did my own scientific study a few months ago for a client that was on the $50k bracket fence (list at $499k or $505k). I found that those that were just over the search brackets did BETTER in terms of DOM and % of list. I have my reasons for why that might be, but your bracket information wasn’t based on the right science. Instead you went back to Real Estate 101 where the big boys teach that as a way to beat down sellers into a lower bracket.

    4) Your Motivated seller argument. Did you run your own stats on that? When I researched sellers that had “motivated seller” in the remarks, I found 400 homes. They did DOUBLED their price drops vs the average seller.

    5) My FranklyCRA (see blog) will give you much more accurate predicted closing prices.

    Ok, that will do for now.

    Oh 1 more thing, a video response:
    http://www.tinyurl.com/redfindebate

    Thanks!

    Frank Borges LL0SA Blog.FranklyRealty.com

  • http://blog.redfin.com/blog/author/glenn%20kelman Glenn Kelman

    Hey Frank,
    Awesome note. I fixed the link.
    We were actually on GMA to talk about a new report, due out Thursday.

    As for your comments on past research:
    We debut listings Thursday night, so they show up in email alerts but also appear as new for Friday web searches. We’ll send you the data for the research on buyer’s agent commissions, if we still have it.

    Check back Thursday for data about when sellers are most likely to accept a discount.

    Thanks again for the lively debate. It’s really good.

    Regards, Glenn

  • http://www.redfin.com/stingray/do/redfin-advantage?direct-section=buy Janelle

    I sent an note to Glenn requesting he bring the 44 pounds cat back to Seattle.

    My husband requested he bring Carla Bruni back to Seattle.

  • http://www.MortgageRatesReport.com Brian Brady

    “Earlier in the day, I’d asked, “Who’re the Jonas Brothers?” The entire green room fell into shocked silence.”

    My daughter Maggie would have your hide.
    Note To GK- Start watching Disney Channel

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