The FDIC Introduces New Risk Rules for Banks

Published: Tuesday, 29 Mar 2011 | 12:16 PM ET

By: John Carney
Senior Editor, CNBC.com

The new risk retention rules proposed by regulators today are far more stringent than major banks had hoped they would be.

The FDIC today revealed a new set of rules that would implement a provision of the Dodd-Frank financial reform law mandating that banks maintain at least 5 percent of the risk of mortgage securities they package.

Banks had pushed for regulators to adopt an expansive definition of the “qualified residential mortgage” that would be exempt from the requirement.

Regulators rejected the most expansive versions of a qualified residential mortgage, which would have exempted virtually every mortgage that banks are now making. Instead, only very conservative, traditional mortgages will qualify.

The purpose of the risk-retention provision of Dodd-Frank was to insure that banks have “skin in the game” when they securitize mortgages—with the hopes that this will incentivize them to police the quality of mortgages that get bundled and sold to investors.

Many lawmakers believe that the ability of banks to distribute the risk of mortgages to investors led to loose underwriting, bad loans, and contributed to the severity of the financial crisis.

The rule proposed today would only exempt securities entirely composed of very high quality home loans. The tests for quality include a requirement for a 20 percent down-payment, a maximum loan to value ratio of 80 percent, a very strong borrower credit history, and a low ratio of borrower debt-to-income. No interest-only loans are allowed, and adjustable-rate mortgages are strictly limited.

The rules are so strict, in fact, that a single loan to a homebuyer who had missed a single credit card payment in the past two years could disqualify a bundle of thousands of mortgages. Such loans would have to be excluded from the securitization.

Bank lobbyists argue that these rules will constrict mortgage lending, make non-qualifying mortgages more expensive, prevent a revival of the mortgage securitization market, and hurt the housing market.

Sheila Bair, the chairman of the Federal Deposit Insurance Corporation, believes that the rules will actually help securitization by instilling investor confidence in the quality of the underlying loans.

Source: CNBC

ARG Capital finds $16M for office building

Monday, January 31st, 2011

TAMPA - The San Diego office of ARG Capital Partners announced it has arranged joint venture equity totaling $16 million for its client Feldman Equities, Inc.

ARG assisted Feldman Equities in securing an all-equity closing on the acquisition of a distressed mortgage note secured by a Class A, 134,065SF office building in Tampa. Given the time-sensitive nature of the transaction and the closing deadline imposed by the note seller, an all-equity closing was required.

Bryan Clark, director of capital markets with ARG Capital Partners, arranged joint venture equity on behalf of the sponsor, Feldman Equities securing a letter of intent for $16M in joint venture equity, with terms acceptable to the note seller, sponsor, and joint venture partner, for an all-cash closing within five days of notification that the previous partner had backed out - with the closing of the acquisition taking place 15 days later.

ARG Capital Partners arranged the joint venture equity through a real estate private equity firm whose principals each have over 20 years of experience.

ARG Capital Partners represented Feldman Equities, Inc., an operator having developed or acquired over 11 msf of office and retail properties with an aggregate value in excess of $2.5 billion.


Source: FloridaRealEstateJournal

Apartments Capitalize on the Trend toward Sustainable Development

By Andre Shashaty, Partnership for Sustainable Communities

Mar 22, 2011

Apartment owners can be excused if they feel like gloating. Many of them watched in amazement as homeownership rates reached a record high of 69 percent, and young families could get a mortgage even if they could not qualify for a lease. Now, the pendulum is swinging the other way, and the apartment business looks primed for a powerful resurgence.
The rental housing industry stands to benefit from a number of trends, including the increasing emphasis in urban planning and land use policy to encourage compact development in infill locations where people can walk or take public transit. Policy makers are realizing rental housing is generally more sustainable because it is usually built at higher densities.
“Not only do apartments offer housing to a wide range of households, they can also help us meet critical national goals like reducing greenhouse gasses, growing more sustainably and creating mixed-use, pedestrian-friendly communities,” says Doug Bibby, president of the National Multi Housing Council.
The shift toward more sustainable development patterns is occurring in cities and towns throughout the nation, the Partnership for Sustainable Communities (PSC) has found. PSC is a national nonprofit organization dedicated to helping real estate developers and owners work with local government planners and development agencies to create more sustainable communities.
In California, multifamily buildings will play a crucial role in meeting the state-mandated goals for reducing per capita emissions of greenhouse gases from private vehicles. The state’s so-called anti-sprawl legislation (Senate Bill 375) requires every regional planning organization in the state to draw up a Sustainable Communities Strategy by changing land use patterns. Key to its success is higher density and focusing development of housing around transit lines.
The law encourages higher-density and transit-oriented development in two ways. It puts new teeth into existing law requiring localities to zone land for affordable housing. It also provides exemptions from very stringent state environmental review requirements for projects that provide affordable housing and are located near transit.
Many other states are also encouraging changes in land use patterns to help reduce greenhouse gas emissions. 
The flip side of the trend toward rental housing is reduced construction of single-family homes on large lots remote from jobs and services. Indeed, the homeownership boom ended with a thud as foreclosures skyrocketed, especially in cul de sac suburbs far from jobs and from which long commutes by car cost big dollars.
Even among companies who are developing rental housing, to an increasing extent garden apartments are out and infill developments are in. Some firms are still building garden apartments out in the suburbs, but the biggest apartment investors no longer see that as a smart investment for long-term holding periods.
Savvy developers such as Equity Residential, SARES REGIS and UDR, among others, are gearing up to resume development, and they are choosing “sustainable sites” near transit and services. They are even putting in car sharing services as a benefit for people who don’t want to own their own car or possess more than one car per household.
There is also good news on the financing front with regards to the creation of rental housing, and thereby more sustainable developments. The Obama Administration’s recent 32-page report to Congress on “Reforming America’s Housing Finance Market” calls for cutting way back on federal support for home mortgages but for maintaining a federal role in supporting financing for apartment properties.
NMHC says the nation is experiencing a boom in renter households that will continue for years to come. “We saw a surge of 2.7 million renters from 2005 to 2007 alone,” Bibby says. “Between 2008 and 2015, nearly two-thirds of new households formed will be renters. That’s 6 million new renter households,” he stated.
The new demographic groups are increasingly turning away from the one-time ideal of living in a single-family home on a large lot surrounded by other similar homes. A large proportion of them want to live near transit, and within walking distance of services and entertainment. That usually means renting. That’s good for apartment owners and developers. It’s also good for the sustainability of our communities.
There has also been a change in attitudes about the financial benefits of ownership. Until the recent spike in foreclosures, a large percentage of home sales were premised on the idea that buying was a financial investment, not just a way to obtain shelter. That is shifting dramatically as more and more households make housing choices based on lifestyle or even environmental factors, and no longer assume that owning is a good investment.
The new housing choices will be largely a function of changing demographics, according to NMHC. The aging members of the Baby Boomer generation are increasingly opting to trade in their suburban houses for apartments as they age and their children move away from home, NMHC says. According to Census data, 75 percent of all seniors will change housing type between ages 65 and 80.
A more powerful force for rental demand are the Echo Boomers, that is, the children of the Baby Boomers. By 2015, there will be 67 million people aged 20-34 year of age, the prime years for renting. A large portion of this population will be living in more sustainable rental communities.

Source:  MHNonline

North Park San Diego Apartment Complex Sold

Press Release

February 8 , 2011

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North Park San Diego Apartment Complex Sold

 "Just Sold North Park Apartment Complex - San Diego"

SAN DIEGO, CALIFORNIA – The two-story 6,638sf, 8 unit apartment complex located at 3983 Iowa Street San Diego, CA 92104 in the North Park neighborhood has been sold for $975,000.

The building was constructed in 1966 and consists of four (4) two-bedroom/two-bathroom units, two (2)  two-bedroom/one-bathroom units and two (2) one-bedroom/one-bathroom units. James V. Carter, Managing Director with Apartment Realty Group (ARG) represented the seller, a San Diego-based private investor.

For more information, please contact James V. Carter at (619) 222-9501, JCarter@ARG1031.com or Anastasia Duboshina at (619) 501-1342, ADuboshina@ARG1031.com

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Apartment Realty Group (ARG) is a multifamily investment sales and advisory services firm with a
proven track-record of value-added brokerage services. ARG has been able to provide sellers with
specialized strategies to maximize property values by creating competition for each marketing assignment as well as providing buyers and 1031 exchange clients with sound investment options which are not generally available in the marketplace. Visit us online at: www.ApartmentRealtyGroup.com

San Diego apartment vacancies in spring up just past 5%

By THOR KAMBAN BIBERMAN, The Daily Transcript

Tuesday, March 15, 2011

San Diego County's current 5-plus percent apartment vacancy would have been slightly lower were it not for the conversion of the 679-unit Vantage Pointe development in downtown San Diego from condominiums to apartments last fall.

MarketPointe Realty Advisors reports the countywide apartment vacancy, which had been 4.75 percent in March 2010, dropped to 4.13 percent last September, before jumping up to 5.06 percent at the time of the March survey.

The report said without the conversion, the countywide vacancy would have been 4.8 percent.

Vantage Pointe had 331 vacancies when MarketPointe conducted its calculations. The complex reportedly cost about $250 million to construct late in the last decade.

While 5.06 percent marks the first time the vacancy rate had climbed higher than five since March 2009 here, San Diego continues to rank as one of the strongest markets in residential rentals.

A Reis report for the fourth quarter 2010 pegged the national apartment vacancy at 8 percent -- the highest that figure has been in the past 30 years.

A Reuters report added that even such strong players as Sam Zell's Equity Residential (NYSE: EQR) apartment real estate investment trust, which paid $200 million for Vantage Pointe last fall, AvalonBay Communities (NYSE: AVB) and Essex Property Trust (NYSE: ESS) have reduced rents and offered incentives in many markets.

Equity Residential is advertising two months free rent on select units at Vantage Pointe according to its website.

San Diego County's apartment vacancy submarket vacancy figures are in quite a narrow range, regardless of where many of the larger complexes are located. MarketPointe restricts its survey to apartment complexes with 25 or more units.

The South County, which experienced a wave of foreclosures in eastern Chula Vista for example, had the lowest vacancy rate in the county at 4.19 percent. The central part of the county, which includes Vantage Pointe, posted the highest vacancy at 6.16 percent.

MarketPointe also noted that while the countywide average rental rate declined between September and March, it only declined by $22 to $1,322 per month _ still quite a high figure when compared to many other areas around the country.

The average rents here ranged from a low of $1,119 in the East County to $1,657 per month in the North County Coastal market.

The San Diego Central market (including Vantage Pointe) had a $1,437 average rent in the March survey and the Interstate 15 Corridor was also quite high with a $1,403 figure.

Vantage Point's standard one-bedroom, one-bath units have base rents generally ranging from about $1,605 to $2,715 depending on size and location. The two bedrooms rent from $2,130 to 2,840 and more again depending on size and location.

Year-over-year, the State Route 78 had the highest percentage increase in rents at 2.17 percent to $1,187 per month.

The East County had the next highest year-over-year percentage increase of 1.63 percent to $1,119.

MarketPointe, which also tracks new residential sales, has seen sizable fluctuations in the number of units it tallies due to whether they are rentals or condominiums.

The report notes that it was March 2003 when the number of units surveyed maxed out at 120,776.

That figure declined over the next several years as condominium conversions became the norm at many complexes around the county, but that trend wouldn't last forever. By March 2007, the conversions were already grinding to a halt.

"Today, with once converted units coming back to the rental market, and several new condominium developments renting units until the 'for sale' market recovers, our current audit measures the performance of 118,041 units contained within 805 rental projects," the report continued.

While MarketPointe says there some 9,127 proposed apartment units, just how many of these will actually be constructed is unclear.

The San Diego Central market, which is still experiencing a surplus of condominium units, has 3,708 apartment units planned.

The Interstate 15 Corridor with 2,187 apartment units, and the South County with 1,707, are the only other submarkets with more than 1,000 units each.

The East County, which was flooded with apartments in the late 1980s and early 1990s, has the fewest planned apartment units at 435.

Marcus & Millichap projects the availability of apartment properties will continue to outpace supply here as would-be sellers hold on awaiting better prices.

The commercial real estate brokerage said this limited availability coupled with the fact that only about 500 market rate apartment units are projected to come on line this year, translates into a market that will be tight for the foreseeable future.

Source: SanDiegoDailyTranscript

Medical marijuana: What are renters' rights?

By Lily Leung

Wednesday, March 9, 2011 at 7:26 p.m.

Landlord attorneys and tenants’ advocates in San Diego County and throughout the state have for more than a decade dealt with a sticky subject that many want to avoid and few know how to address.

The puzzling question: Can renters smoke and grow pot at home if they prove they’re medical marijuana patients with doctors’ notes and state-issued cards?

The answer: It depends.

In most cases, tenants don’t disclose they use or grow marijuana. If caught, they tend to give in to eviction because landlords are covered by no-drug and no-smoking clauses in leases, and a lack of case precedent in California.

The issue of medical marijuana and housing has resurfaced as one state lawmaker is sponsoring a bill that would forbid employers from denying employment solely on medical-marijuana status. Some believe, if passed, the bill could make way for housing protections, like those provided in Arizona, which passed its medical marijuana law in the fall.

The Arizona law states, “No school or landlord may refuse to enroll or lease to and may not otherwise penalize a person solely for his status as a cardholder, unless failing to do so would cause the school or landlord to lose a monetary or licensing related benefit under federal law or regulations.”

No such provisions exist in California.

“Under state law, it’s just not clear, because the courts haven’t spoken to this question,” said Alex Kreit, a law professor at Thomas Jefferson School of Law who specializes in medical marijuana.

“Tenants could challenge (eviction) by saying it’s discriminatory,” said Kreit, referring to fair-housing rules. “But it probably will be an uphill battle.”

Legal battles could end up being time-consuming and costly, so tenants often hide medical marijuana use or cultivation. Often, if found out by their landlords, they can end up being evicted.

Medical marijuana patients and distributors, such as Oak Park resident Long Vo, 27, say they’re respectful of the leased properties and their neighbors.

He cultivates two marijuana plants on the balcony of his rental, and his landlord approves because he’s discreet and pays his rent on time.

“Growing up, my family didn’t like that I smoked marijuana and considered it taboo, but now they see it’s considered medicine, that it helps people,” said Vo, who used to operate a dispensary in Spring Valley and now makes licensed deliveries to patients.

Meanwhile, many landlords don’t want medical marijuana on their premises, fearing exposure to children, smoke damage to property and offending other tenants.

In some cases, landlords have cited water damage and mold issues stemming from undisclosed sprinkler systems used to water pot plants.

Eric Wiegers, spokesman for the statewide apartment association, said he’s heard of both extremes: landlords who are OK with medical marijuana as long as it doesn’t affect others, and landlords who are opposed to the drug, regardless of use and medical condition.

“It breaks down to the individual landlord,” Wiegers said.

Hope for clarity

Medical marijuana advocates hope a bill reintroduced by Sen. Mark Leno, D-San Francisco, that addresses employment and medical marijuana could make way for more clarity on the issue.

Leno’s measure calls for the reversal of a state Supreme Court case that allows employers to deny employment or advancement solely on medical-marijuana status. It reached then-Gov. Arnold Schwarzenegger’s desk in 2008 but was vetoed.

Leno said the higher-court ruling was “irrational” because it suggests “the compassionate use of cannabis is only for unemployed people.”

Leno says the bill would affect about 250,000 medical-marijuana patients in California (those who have obtained doctors’ recommendations). Americans for Safe Access, an advocacy group, estimates that 50,000 to 70,000 are in San Diego County. On the topic of housing, which is not discussed in Leno’s bill, he said, “someone should not lose one’s home as a result of patient status.”

He added: “I can’t imagine voters (who supported medical marijuana in 1996) only wanted compassionate use for only homeless people or those who own their own homes … It’s just nonsensical.”

Tyrone Sky Williams, 34, said he was given a 30-day notice after his landlord discovered he had equipment to grow medical marijuana in his Oceanside rental. Williams, who is disabled and holds a medical marijuana card, said he never disclosed his status to his landlord but figured as long as he was a good tenant, everything would be OK.

He’s now staying with his mother in Carlsbad.

Williams said his landlord doesn’t condone medical marijuana not only on his property but anywhere.

“I didn’t seek help,” Williams said. “I felt like I didn’t know what to do.” 

Historical background

Since 1996, Californians have been able to obtain and use medical marijuana with doctors’ recommendations and be immune from criminal prosecution or sanction. In 2003, the Legislature passed a bill that made way for state-issued, voluntary medical marijuana cards that gave patients added protection when dealing with law enforcement.

However, neither measure addresses patients’ rights and housing, allowing landlords to evict such tenants.

Nowadays, landlords tend to address the issue of medical marijuana with no-smoking clauses, which are showing up more often in rental agreements. They’re also covered by including a clause stating adherence to federal law, which deems marijuana, no matter the use, to be illegal.

By default, marijuana use of any kind is forbidden in HUD housing and military housing, which are funded by the U.S. government.

Full disclosure advised

People on both sides of the debate say there’s a fair way to get around medical marijuana and housing, and it starts with full disclosure.

“If you want to medicate in your home, make sure that’s OK with your landlord because they’re inevitably going to find out,” said Kimberly Simms, a San Diego attorney who deals with medical marijuana cases. “That’s especially if you’re growing.”

At that point, several scenarios, some including compromise, could unfold:

• The landlord could still decide to evict.

• The tenant is asked to take the plants inside and cover air vents when taking medication.

• Bring in a third party to confirm tenant’s need to use marijuana for medical purposes.

“You must negotiate in advance,” said Lance Rogers, another medical marijuana lawyer in San Diego. “The challenge with landlord-tenant rights is that it’s governed by contract — and many of those contracts don’t contemplate medical marijuana.”

Kathy Belville, a real estate attorney at Kimball, Tirey & St. John in San Diego, suggests that landlords build in specific rental criteria into rental agreements to avoid ambiguity.

“I suggest they develop policies,” she said.

Source: SignOnSanDiego

Debut: The U-T tracks bills about California housing

San Francisco lawmaker's proposal is causing uproar among landlords

By Lily Leung

Monday, March 14, 2011 at 9:14 a.m.

More than 2,300 bills have been introduced this state legislative session.

Instead of having you go through all of them, the Union-Tribune is doing the work for you. We're sorting through the proposals and finding the ones that could highly impact those in the real estate market -- from renters to property owners to builders -- and breaking them down in this blog.

Bob Pinnegar, executive director of the San Diego County Apartment Association, estimates about 70 bills being reviewed this session are related to housing, up from the usual 30 to 50, he said.

Why the uptick?

"It's a new legislative session and we have a new governor," he said, referring to Gov. Jerry Brown. "Everyone is looking at past bills that didn't pass and testing the waters (again.)"

Today, we're featuring Assembly Bill 265, brought forward by Assemblyman Tom Ammiano, D-San Francisco.

THE PROPOSAL: Currently, landlords can give residential tenants three days' notice "to pay or quit" if they fail to pay rent on time. After three days, if tenants don't pay, then landlords can move forward with eviction. The bill calls for an extension of that period to 14 days. 

PROPONENTS: Ammiano says the bill would help those who are having trouble paying their rent because of tough circumstances, mainly unemployment and costly medical bills. "Many of these people have nowhere to go and have no other resources," he told the Union-Tribune. "It's simply an extension."

The measure is backed by San Francisco-based group Tenants Together, which has had a longstanding relationship with Ammiano. Dean Preston, the organization's executive director, says the state is "out of step" with other areas in the U.S., where the pay-or-quit time frame is longer -- ranging from five to 30 days.

"We believe it's unreasonable to expect, particularly in this current economy, that tenants who can't come current within three days should have to vacate their homes," Preston said.

OPPONENTS: The apartment associations have come out firmly against Ammiano's proposal, particularly the California Apartment Association, whose members have sent more than 750 letters opposing the measure.

Association spokeswoman Debra Carlton said the bill would cause financial burdens on landlords, many of whom are trying to be on time with their mortgage payments. Carlton said rent is typically due on the first of the month, but often landlords grant grace periods, so rent can sometimes be due without penalty through the fifth of the month. When a three-day pay-or-quit notice is issued, she said it doesn't mean tenants are kicked out immediately, rather it signifies the start of the process, which can stretch for weeks or months, she said.

"Obviously it would make it difficult for landlords to pay their own bills if the tenant isn't paying until the middle of the month," Carlton said. "(By then) they will have more bills due. They have employees to pay. What we're talking about here is the changing of the income stream."

Karen Murphy Gross, senior vice president of Mission Valley-based R.A. Snyder Properties, calls the bill an "absolute bad thing for our industry."

"Many landlords allow for grace periods of three to five days," said Gross of the property management company. By the time the three-day notice is over, "you're already extended to the second week of the month."

She said extending that time frame to 14 days would imperil landlords, especially those with smaller operations. 

STATUS: The bill was scheduled for its first hearing on Tuesday. However, it will be rescheduled.

Source: SignOnSanDiego

2,580-Unit Multifamily Portfolio Trades for $460M

Mar 14, 2011

By Barbra Murray, Contributing Writer

In what local industry experts are touting as the largest multifamily real estate transaction in the United States since 2008, Pantzer Properties and Dune Real Estate Partners have acquired the 2,580-unit Magazine Portfolio in metropolitan Washington, D.C. for $460 million. The 50/50 joint venture snapped up the group of eight apartment communities, located in Northern Virginia and suburban Maryland, from RREEF, the real estate investment management business of Deutsche Bank’s Asset Management division.

RREEF had owned the Magazine Portfolio since 2006, when it purchased the properties from Morgan Stanley and partners, who had come into possession of the assets and 29 others with their $1.7 billion all-cash acquisition of former multifamily REIT Town & Country Trust. Six of the apartment communities are located in Virginia, including Barton’s Crossing in Alexandria; Carlyle Station in Manassas; Glen at Leesburg in Leesburg; Lionsgate and Village at McNair Farms in Herndon; and University Heights in Ashburn. The remaining properties, Fox Run and Watkins Station, are located in Germantown and Gaithersburg, Md., respectively.

Law firm Ballard Spahr L.L.P. represented the joint venture in the transaction, and commercial real estate services firm Jones Lang LaSalle, which marketed the Magazine Portfolio, stood in for the seller. The $460 million price tag included Pantzer Properties and Dune’s assumption of a $410 million debt, which the joint venture paid down to $390 million. More than a few investors were interested in the portfolio, but few were positioned to follow through with the terms. “The debt modification was a hurdle for some people,” Jason M. Pantzer, managing director with Pantzer Properties, tells MHN. Pantzer Properties made its portion of the purchase through its Panco Strategic Real Estate Fund I L.P.

It is no wonder that the Magazine Portfolio turned heads. “Metropolitan Washington, D.C. is one of the most vibrant apartment markets in the country,” Pantzer says. “All engines are running. It has tremendous infrastructure, high barriers to entry, and the ultimate tenant–the government. Also, the bloom is off the rose for home ownership; people are enjoying renting. We wouldn’t have done the deal if we didn’t have a lot of conviction in the market.” The Washington, D.C. apartment market closed 2010 with a vacancy rate of 5.4 percent, well below the national vacancy rate of 6.9 percent, and the figure is on track to drop to 4.1 percent in 2011, according to a report by Marcus & Millichap Real Estate Investment Services.

Pantzer Properties and Dune have rebranded the Class A and B+ apartment communities under The Point apartment homes flag, and Panco Management, Pantzer Properties’ management arm, is now managing the assets.

Source:  MHN online

Memo to California Regional MLS: That Train Has Left The Station

Published on Wednesday, February 16, 2011, 4:23 PM Last Update: 2 day(s) ago by Mike Parker

In yet another example of  technology being obsolete by the time it is implemented, “California's statewide multiple listing service has begun a rollout of Point2's real estate listing syndication and marketing program" Point2 announced today.

This follows on the heels of an excellent article published in the same publication (Inman News) recently, titled “Google’s place in Real Estate” by Andrea Brambila pointing out that Google, the absolute KING of the Internet, was abandoning its specialized real estate marketing (and Google Base) for several reasons, including “a lack of traffic on the sites.”

In a separate announcement a few weeks ago, Yahoo announced that it was assigning its real estate marketing efforts to another company. In other words, the three big players in Internet search marketing, Google, Yahoo and MSN have concluded-among other things—that portals do not bring enough traffic, that there is a “proliferation of property-search sites” that have marginalized the concept of a real estate portal, with very few exceptions.

Yet now, a company continues to publicize constructing yet another elaborate new MLS portal incorporating multiple MLS listing sites designed to reach—in its ultimate configuration—26,000 real estate professionals.

The Press Release received from Point2 also proudly stated: “As part of the agreement, the MLS will publish Realtors' listings to Point2's syndication network, which includes nearly 60 real estate consumer websites, search engines, classifieds and auction sites" Point2 said.

Breaking news flash: When you put a listing in MLS, it already is syndicated all over the web.

Three years ago, “syndication” was a great idea. Emphasis on ‘three years ago.’ Today, in the words of a leading agent/broker: “This syndication feature is meaningless.”

Someone needs to get current: portals are so yesterday

It is estimated that consumers (not real estate professionals) enter 880,000,000 real estate related searches monthly—just on Google! Yet Google has abandoned their real estate portal and has evidently decided to let Google search be their solution for the consumer. Simultaneously, they decry the proliferation of portals as 'muddying the market'. The simple fact is that CONSUMERS have no concept of which portal is which: they simply go to a search engine. With few exceptions, consumers ignore the “6o sites." It was a great idea that turned out to ignore consumer’s preferences: Consumers want to find what they want in the fewest steps; hence why search engines will always be the first place most people go to look for a home.

Four years ago, when portals were new, I wrote that they were devices designed to seek revenue from real estate agents for advertising and that they would not work. With the possible exception of Trulia, that holds true today, as well.

There are now so many portals out there that It's prompting a trend; organic search is being supplemented by more paid search and consumers are accepting paid search results more. That's good for Google and Yahoo, but it can be expensive for agents and brokers. 

The truth is that 95% of agents fail at online marketing because  they have listened to an entity that pays a royalty to NAR tell them how to place listings online and market them through their portal, realtor.com. This “Regional MLS Rollout” is just more of that management, more of that failed approach to online marketing, and a direct contradiction to what the major players in Internet marketing for REALTORS® have told us by their withdrawal from the business of portal marketing.

The truth is that the 5% of agents who succeed online average three times the earnings of those who do not succeed; the truth is that those who do succeed know the musts and do the work to match those musts with what they do.

Today, online marketing for REALTORS® is about being found online--be it through organic search or paid search, converting visitors to registrations, engaging those registrations and developing them into purchasers of real property. With respect, that isn’t done through MLS or syndication. It is done though precise targeting, strong marketing, and through follow-up immediately upon contact.

Any one telling you otherwise  is trying to preserve the status quo. In the real estate business, the status quo may remain for realtor.com, but a 95% failure rate is not what agents and brokers want as their personal status quo. When Google and Yahoo admit that real estate portals are fragmenting the search exerience for consumers (i.e., sastisfaction), maybe it's time to consider a new approach. For certain, joining MLS together is of no interest to consumers, and that is the point: in Internet marketing; what realtor.com or the old guard wants has produced a realtor dissatisfaction rate of 95% with Internet marketing. Perhaps you need to stop looking to realtor.com for your Internet marketing solutions. They have the NAR endorsement all to themselves and have for years, yet 95% of agents are unhappy with the results. By any measure, something needs to change.

So, congratulations to those California MLS who have agreed to share listings. As more MLS do the same, some benefits will accrue, but not many of them will accrue to the agent in the field. Nor will it help an agent meet more buyers or sell more houses. The great MLS conglomeration is an idea whose usefulness left the station on the 2009 train.

Source: BrokerAgentSocial