Zillow.com said it is laying off 40 workers, about 25 percent of its staff, to weather the "economic storm."

The Seattle-based Web site provides consumers with estimates of their home's value based on market trends and sales.

"This was an incredibly painful decision for me and the leadership team, but, in the end, we concluded that we had no choice but to securely batten down the hatches as we sail into a major economic storm," said Zillow chief executive Rich Barton on the company's blog.

The staff reductions are effective Tuesday. Laid off workers will receive severance packages.

The housing industry has seen sales and prices fall steeply as mortgage money becomes increasingly hard to find. Some major banks and financial houses collapsed under the weight of subprime mortgage loans in recent weeks sending financial markets into a panic and prompting Congress to enact a $700 billion bailout bill.

A recent Webware column by Rafe Needleman names one of our favorite Web sites, Seattle-based Zillow, among 11 Web 2.0 start-ups "in serious danger of falling off a cliff."

Zillow's the site that gives approximations of your home's value based on sales and market data of nearby and like properties.

Here's what he says:

"The real estate site's revenue model is advertising. Real estate and bank advertising. Unless the real estate site starts charging for foreclosure listings, I don't see it doing too well in a hunkered-down economy in which people are trying to hold on to their homes for dear life, not upgrade."

At Zillow, as you might guess, they disagree.

Here's part of their reply from Zillow director of community relations David Gibbons:

"We actually do have a revenue-generating relationship with the supplier of our foreclosure listings, thanks, You're right that it's one of the opportunities to make lemonade right now. Zillow traffic is actually up 40 percent from last year. We're fortunate to enjoy a very strong brand in a fragmented real estate market."

Gibbons says on-line ad growth is out-stripping traffic growth.

"I won't deny that these are tough times and there's no free lunch in the real estate media industry right now. We've been very frank about the fact that this market delays IPO plans for Zillow. But there are opportunities in every market and many home buyers and owners are more interested in the value of their homes today than ever."

The upside of all this housing gloom is that homes that previously seemed unreachably expensive are now more reasonably priced - at least for those with cash and good credit.

We're planning a story or stories about the relative bargains that are now available on the market.

Real estate folks, e-mail me, John Gillie, at john.gillie@thenewstribune.com, with your nominations for the best bargain houses or condos available now.

Include your reasons for nominating the home. For example, it's priced substantially below what the neighbors paid for their homes, it's 60 percent of last year's asking price, it comes with a free cruise on the Amazon or the owner is willing to finance with zero down.

We're looking for a variety of properties at several price points and in several areas of the South Sound.

Our selections will be made somewhat arbitrarily with an eye toward providing our readers a broad idea of what's available on the market. If your nomination isn't picked, it's nothing personal. It may be that we just had too many nominations for 4-bedroom homes in Proctor.

Molly Smith spends much of her time making other people's houses look good. Smith owns Molly Smith Designs in Tacoma, which helps people stage their houses.

We asked her what some of the top mistakes she sees when people stage their homes to be put on the real estate market:

Not addressing bad smells

Not making sure the house is clean and clutter free

Not addressing bad paint color

Not removing draperies or window coverings that are dated and,

Just not having the home completely ready before it’s put on the market

Smith said she sees home owners who have too many personal items on display. She suggests putting family photos away when listing a home.

She said she’s noticed more homeowners realizing the benefits of properly staging their homes.

“I would say that more and more people are doing consultations and more and more people are understanding the importance of staging,” Smith said.

Depending on the needs of the home, Smith said a consultation with her would start off at $75 for an hour. If the home is not yet vacant and depending on its condition, the price could jump to as much as $1 per square foot for a “full blown staging.”

Smith said that because of limited funds, some homeowners benefit more from having a consultation then having someone do the staging for them. “People are still pretty tight with their dollars and want to spend as little as possible,” Smith said.

“Usually they get the most bang with a consultation and just being told what to do versus having somebody do it for you.”

By LaShonna McBride, for The News Tribune

From the coffee wars to the commission wars, Consumer Reports has now taken on the issue of agent commissions paid by home sellers, according to a story this week from The Associated Press. The magazine's recommendation: Negotiate for less than 6 percent.

It also details the companies where agents were most willing to negotiate (Re/Max) and how lots of consumers who didn't try to whittle the commission they paid later regretted it.

Here's the AP story:

Don’t be shy about haggling over what you pay your real estate agent.

A study released Monday by Consumer Reports found 71 percent of sellers who negotiated for lower commissions with their brokers were successful. But only 46 percent of sellers surveyed tried.

Those who paid commissions of 3 percent were just as satisfied with their broker’s performance as those who paid 6 percent, the study found.

The lesson? Haggling won’t hurt.

In fact, those who paid higher commissions were more likely to have regrets about the selling experience. Nearly one-third of them said they should have been more aggressive in negotiating a fee.

Sellers were most likely to get lower fees from independent and RE/MAX brokers, said Mark Kotkin, director of survey research at Consumer Reports.

“But they will all negotiate. Just ask for it,” he said. “It’s like buying a car. A lot of people think (the price) is set, but it’s not.”

Independent brokers may be more likely to negotiate fees since they keep their entire commission, while those who work for other brokers typically split commissions with the broker in exchange for marketing and office support.

About half the home sellers surveyed paid less than 6 percent in commission. The study is being published in Consumer Reports’ September issue. The issue also includes tips on which home improvements provide the biggest pay off (Hint: What’s on the outside really does matter).

=> Read more!

We know people use gift cards, furniture shopping sprees and even free cars to sell a home. But a gift card for signing up with a specific agent?

Patricia Graham, a new agent in Orting, is offering a $1,000 gas gift card or the equivalent in cash to customers who list a home with her or use her services to buy a home. The giveaway comes at closing, she said.

Graham said the idea grew out of a marketing plan she designed with the help of her broker to build clientele. Living in Orting, she knows many residents work far from home and thought a gas card giveaway might catch their eye. (Her husband drives daily to his Boeing job in Everett. It’s 125 miles roundtrip.)

Graham, who’s working at Northstone Real Estate, said she was drawn to today’s market because she’s wants to get involved on the investment side.

“It’s been a dream. It’s just something I have a desire to do,” said Graham, who has an eclectic work background, from hair dresser to shoe saleswoman to bus driver.

Graham got started in real estate in April and launched her gas-card giveaway about two weeks ago.

“I have a lot of people who think it’s a great idea, but I haven’t had any action on it yet,” she said.

Any thoughts? Would the prospect of a $1,000 gas card entice you to sign up with a particular agent?

A new real estate survey says home sellers remain pretty well satisfied with their agent if their home is sold in five months or less. Which is longer than I would have thought but shorter than the six months it took to sell the average home. Results of the survey, by J.D. Power and Associates, say a seller’s satisfaction averages 794 on a scale of 1,000 among those whose homes sold in five months or fewer. But the number declines to 730 if selling the home takes seven months or more.

Other tidbits of interest, according to the survey:

Prospective buyers, on average, see about 13 homes before buying.

Sellers, on the other hand, said their home was shown about 11 times, on average, with about five open houses conducted. Anyone else surprised by the number of open houses? Seems high, though I know that the down market has agents turning more often to open houses to market their listings now than they did a couple years ago.

Almost half of customers found their agents by talking to family or friends. About 28 percent used the Internet and 23 percent used an agent they’d previously hired.

J.D. Power also ranked real estate companies according to customer satisfaction and gave top honors on the buy side to Keller Williams and to Prudential for sellers. Go here for the buyer ratings and seller ratings.

I was putting together a post on one thing (use of the term “below market” to market and sell a home) when I noticed something even more interesting: Prices on three of five homes I spotted with “below market” in their listing remarks on June 3 are still for sale. (The other two are no longer listed.) These were homes that, according to the listing remarks in June, were already priced below market value. And all three have since seen price drops.

Two are located in Sumner and one is in Gig Harbor. Here’s a breakdown of each:

Sumner five-bedroom: Price dropped from $719,950 to $675,000, a change of 6.7 percent. The listing on this 3,295-square-foot home puts it near Lake Tapps. The home was built in 2006 with 2.75 bathrooms, including a master suite, landscaped yard with sprinkler system and built-in bookshelves.

Gig Harbor three-bedroom: Price dropped from $690,000 to $667,250, a change of 3.4 percent. This 3,209-square-foot house sits on 1 acre with a wetbar, slate countertops, birch hardwood floors and a six-burner gas stove in the kitchen.

Sumner four-bedroom: Price dropped from $559,950 to $539,950, a change of 3.7 percent. This 3,064-square-foot home is advertised near Bonney Lake as "a steal” and “well below market value.” It has a den and bonus room and a five-car garage. It’s also in a gated community and was built in 2006.

I reached Windermere listing agent Melissa Moller, who's selling the Gig Harbor home, and she said the house appraised even higher than the June price -- at $749,000 in November 2007.

“It’s within a mile of the most desirable area, downtown Gig Harbor, so when it was built we assumed that would be a plus. And so did the appraiser and it also has all kinds of features,” she said.

The house was listed about a year ago at $735,000 and came down to $667,250 near the end of June, Moller said.

“If you can’t sell them, you’ve got to lower them to where the market is,” she said.

Moller pointed to the lack of financing options, and therefore buyers, as fundamental to today’s difficulty in getting homes sold.

“The creative loan options just aren’t there. I can’t say they need to be there. There’s just such a swing as the market adjusts. That needed to happen,” she said.

A few similarities stand out among these three listings: All are around the same size and all have what appear to be top-of-the-line amenities. All are a drive from major employment centers and could face some gas-price resistance from prospective buyers who feel disinclined in today's economic climate to commute. And all are more than double Pierce County’s median home price of $259,950.

For some additional context, prices on homes across the county have dropped in recent months. From January to June, for example, the median price fell 5.5 percent on closed sales compared to what was sold in the first six months of 2007, according to the Northwest Multiple Listing Service.

You might notice something missing next time you do an online home search. A home listed through the Northwest Multiple Listing Service for which an offer has been made will no longer be viewable on public Web sites as it moves through the process, including a home inspection.

It used to be that such homes would continue to be publicly listed for a number of days and would be labeled “Active/STI” or something similar that indicated the home was spoken for and an inspection was underway. Brokers, agents and their customers, of course, will continue to see the status of a home that’s for sale, whether active, pending or sold.

The change, which went into effect this week, accomplishes a couple of things, said Dick Beeson, who is a Windermere broker and a director for the Northwest Multiple Listing Service. First, it clears up some statistics. Previously, homes that had an offer and were subject to inspection were counted in the active listings category, even though they were actually pending sales, Beeson said. (At least 75 percent of properties that receive an offer, become closed sales, he said.) And it provides a more clear explanation to home shoppers of the status of a sale.

So it seems for buyers, the change will declutter a home search of houses and condos that likely will be fully off the market in a matter of days. For sellers, it could mean fewer days of marketing should the sale fall through after inspection.

OK, so it’s not all that warm out, but summer is officially here and it got me thinking this week about swimming pools and whether or not they add to a home’s allure. Not many Northwest homes have built-in pools compared to some other parts of the country, but they’re definitely out there and I’ve heard that pools can be more of a liability (homeowners worry about the safety of their kids and grandkids) than a benefit. On the other hand, swimming and parties around the pool can be a great way to spend the warmest months of the year.

Any thoughts? Would you be drawn to a home with a nice swimming pool?

A related side note: I noticed in a recent search that a lot of listings that mention a swimming pool play up the public pool near the house rather than a private home pool. So some people marketing homes for sale think people here like to swim.

Here’s a way to let the market dictate the price on a house: Lower it in regular increments until someone bites. I ran across a listing in Sumer that promises to discount the price of a two-bedroom house by $1,000 a week, like an auction in reverse.

As of today, the list price was $190,999 – $9,000 lower than when it was put on the market about two months ago, according to Keller Williams listing agent Leslie Williams. How low does he expect it to go? Williams said that’s up to his client but that she knows the average time on market in the Sumner area is four months.

In a softer market, Williams said sellers need to think outside the box. A few weeks after putting the property up for sale, the owner was considering a $5,000 to $10,000 price drop. Williams said he wanted, instead, to try a marketing tactic that would stand out from a crowd of price-reduced listings.

“What we were seeing before the reductions, we were seeing a drop in interest in the property. The flurry of interest comes, and it’s gone after a week or two,” he said.

Traffic, he said, has since picked up on the property’s Web listing. The house, which isn’t quite 1,000 square feet, was built in 1955. Williams is pitching it as ideal for an investor. The marketing remarks mention work needed, but Williams said the fixes are minor, such as a cracked window in the laundry room.

“I think it’s just a matter of time,” he said.

What do you think? Anyone else seen something similar? Or any other creative marketing tactics in recent weeks?

More information about the marketing history of a home listed through the Northwest Multiple Listing Service, which includes the vast majority of homes for sale in Pierce County, is scheduled to start coming your way in July. The broker-owned listing service has decided to allow real estate brokerages to display on their Web sites the number of days a home has been on the market.

Such transparency pulls back the curtain on data previously available only to real estate agents, brokers and their customers. It also marks a change in philosophy from guarding data only accessed by hiring an agent or broker to trying to leverage it as a means to build stronger relationship with consumers.

Tom Hurdelbrink, CEO of the Northwest Multiple Listing Service, said the listing service has been talking for a long time about how to adapt to the comfort level today’s real estate consumers have with the Internet.

While Hurdelbrink said some other listing services around the country also give consumers access to the length of time on the market, the Northwest MLS will be among a minority providing the statistics.

“It’s another way to offer content to the consumer that may entice or compel the shopper to call the real estate broker to talk about their serious interest as a buyer or seller,” he said.

Much like retailers, Hurdelbrink said he thinks real estate companies will evolve toward a strong presence on both the Internet and at the street level.

“We’re figuring out how that can work in parity,” he said. “That is hard, particularly for people like me who are over 50 who didn’t grow up surfing on the web. I thought eight-track tapes were radical. Ask anyone in their 20s what an eight-track tape is today.”

Hurdelbrink says he’s aware that releasing the information could bring criticism from home builders and sellers, but he thinks the statistics made available in July will ultimately be considered as standard as what’s available to consumers today, such as price, location and the MLS listing number.

The official rule change occurs July 3, but Hurdelbrink said it will likely be mid-July before you’ll see it pop up at your favorite real estate Web site as the MLS continues to work out some technical kinks. Redfin already posts days-on-market stats on its Web site. Hurdelbrink said the listing service decided against penalizing Redfin for using the statistics since the rule change was in the works.

One final note: The number of days on market for what’s sold and listed won’t be available in the monthly MLS statistical release in the near future, so I won’t be able to report the numbers countywide when I report the median home price, sales activity, etc. Hurdelbrink said providing those numbers requires a different setup than getting them to brokerages.