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Tuesday, February 7, 2012
Posted by nithi.vivatrat on April 21, 2009
The article “Brokers Enrich Their Web Tactics” from last Sunday’s New York Times caught my eye. For those of you who are not up to speed on social media techniques for marketing homes, the article provides a pretty good survey. I thought I would also use this opportunity to invite everyone to follow us on Facebook and on Twitter (@nithivivatrat, @smithadams). I know, shameless plug…
Posted by nithi.vivatrat on April 13, 2009
When I talk to prospective homebuyers about SmithAdams, I spend much of the time, not surprisingly, explaining how our fee structure works. I thought it would be useful to recap a typical recent conversation:
“How do we get started?”
To get started, SmithAdams presents you with an engagement letter similar to that of an attorney. This letter describes the terms of our relationship, the scope of work, and the fees associated with our services. Our invoicing process is described in detail in this letter as well. Unlike the typical buyer representation agreement, there are no stipulations about exclusivity. By mutually agreeing to the terms of the project as described in the letter, you and SmithAdams are on the same page as to how we will work together.
WAIT! There is more to read… read on »
Posted by nithi.vivatrat on April 10, 2009
When I tell people who knew me from my tech sector days that I’ve launched a new venture, I’m often asked, “Another tech company, right?” When I answer, “Actually, I’m launching a new type of real estate brokerage firm,” the response I usually get is “Really?”
Of the handful of business ideas I considered for “the next thing,” why did I choose real estate? Leaving aside the reasons I have already given as to why I thought this was perfect timing to start a company, let me explain why I focused on this particular industry.
First, the real estate brokerage industry is way overdue for evolution. Despite all of the technological advancements affecting this industry (internet-based information sources, mapping platforms, and others) over the past decade, the fundamental business process has not changed. Innovation is the exciting part of business.
In addition and related to overdue innovation, this industry has very entrenched incumbent players that have always resisted change (see the Justice Department Antitrust Division’s intervention regarding internet-based brokers, or virtual office websites). Poking a stick at it sounded like my idea of fun — I love a good challenge.
Finally, of all the business plans I considered, this one was in an industry where I could directly impact individual consumers. My last company provided consulting services to large corporations as well as government agencies; there, the projects I enjoyed the most were those I felt had a direct impact on individuals, such as our work in education analytics. This time around, I wanted to work in an area where people could easily relate to what I did and how my business could impact them.
That has been the best part of launching SmithAdams. While I always had to explain what data warehousing was, I never have to define real estate brokerage to people. Many folks have their war stories about good and bad experiences with real estate transactions. So I get to focus on explaining how SmithAdams is different and how we help the consumer save money and improve the overall experience for real people. I love this job.
Posted by nithi.vivatrat on April 8, 2009
When it comes to designing compensation programs, my good friend and experienced HR executive repeats this mantra: “compensation drives behavior.” As I talk to people about the incentives created by the traditional commission fee structure in real estate, this refrain often comes to mind. I thought of it again as I read the April 1 Washington Post article “Four Banks Are First to Return U.S. Aid,” discussing that, while returning taxpayer money would typically be viewed as a good thing, in this case it threatens to undermine the goal of increasing lending (so much irony here).
The primary reason these banks are rushing to repay this money?
“Banks seeking permission to repay the Treasury, however, argue that compensation restrictions are the real threat to lending. Neil M. Barofsky, the special inspector general who oversees the investment program, testified before Congress yesterday that a survey of nearly 400 aid recipients found widespread concern that limits on pay will hamper retention of top employees, putting aid recipients at a competitive disadvantage.”
It should not be surprising that executives at banks receiving TARP money, especially those that were not in bad shape, would prefer not to have constraints on their pay. Indeed, that same day, the House of Representatives approved the Pay for Performance Act of 2009 that prohibits “unreasonable or excessive” compensation or bonus payments that are “not directly based on performance-based measures” (it’s important for the Members to show the appropriate outrage to their constituents).
To recap: we got into this mess partly because certain people were getting highly compensated for making loans they shouldn’t have been making; now that we need lending to increase to stimulate the economy, we’re going to implement curbs on compensation to the executives at the banks that take federal funds intended to spur that lending. Anyone else confused/frustrated/angry?
In conclusion: never underestimate the unintended behaviors and outcomes that compensation methods can create.