Jay Zenner

One section of the Newcomers Guide to Buying Luxury Homes in Durham posted on DurhamLuxRE.com specifically addresses some of the technical issues that can vary from state to state. The most important of these is the concept of agency. Until a few years ago, all real estate agents in North Carolina technically represented the seller in a transaction, even when that agent was engaged by the buyer. The real estate commission decided that buyers deserved equal representation and formally established “buyer agency” with its own set of practices and requirements. All licensed agents are licensed to represent either buyers or sellers and under certain circumstances they can represent both in the same transaction. When an agent or broker (all licensed agents in North Carolina are now brokers) signs a listing agreement with a seller, or a buyer agent agreement with a buyer, they assume some important obligations to protect their clients’ interests. When interviewing buyer agents it is important to be careful about what information you share with them about your motivations or financial situation until you actually sign an agreement. An agent may show you homes without a buyer agent agreement in place, however, at that point the agent is technically representing the sellers and should use any information they have learned from you to get the best deal for the seller, not you. This troubles some buyers who do not want to commit to a buyers agent that they may have just met. However, most buyer agents will work with a client with a short term agreement or readily release a buyer from an agreement if some conflict develops. Per the Commission regulations, one of the first things any agent you talk to in a “meaningful” way should do is explain these agency rules. This is not only a NCREC regulation, it makes sense and protects the buyer’s interests.

One of the first things I like to do with a new buyer client after discussing agency is review a flow diagram I put together that illustrates all the steps and different professionals that are typically involved in the home buying process. This only takes a few minutes but it makes subsequent communications much better and minimizes surprises in the process.

A friend and reader of the Durham Luxury Real Estate blog forwarded an article to me about branding in real estate. The analysis was primarily intended for large national developers but it made some points worth considering in our effort to improve the marketing of luxury properties in Durham.

This blog has taken the point of view that one of the reasons, if not the primary reason, that the luxury home market in Durham is not more vibrant, is that the Durham "brand" has not caught up with the emerging reality. This is not a unique observation. During the last couple of years the Durham Convention and Visitors Bureau has headed up an effort to brand Durham as the city "Where Great Things Happen." The group that developed this slogan and the the graphics associated with it represented a broad spectrum of community groups. As you might suspect, some compromise would be necessary to reach a consensus. Nevertheless, if promoted aggressively and adopted widely, this will improve the situation. To put some legs under it, it needs a more concrete emphasis. Just like marketing homes, the community needs to emphasize what marketers call a "unique selling proposition."

For years the Chamber successfully promoted Durham as the City of Medicine in spite of the fact that the vast majority of people consider medicine as something you take when you are sick. What the city fathers had in mind, of course, was medicine as a noble profession and it let us emphasize the number of people that lived here with post graduate degrees and the ascendency of Duke as one of the leading medical centers in the world.

With that firmly established, the strongest reason we can offer people to look closely at us now is the fact that we are rapidly becoming the "arts and entertainment" hub of the Triangle. The cumulative impact of our great selection of fine restaurants, the DBAP and the DAP, the Arts Council, the Golden Belt development, the Carolina Theater, and the new Performing Arts Center is that it's not a hard case to make that Durham is a great place to live, maybe even the best place in the Triangle to live. The emphasis on "arts and entertainment" was what propelled the initial marketing of downtown revitalization. That direction also helped it attract residential and business development as well as encourage additional growth in arts and entertainment.

The real estate community and especially those that market luxury properties need to wave that banner more and more. The copy in our brochures and on our web sites needs to address the fact that people aren't just looking for shelter, they're looking for a lifestyle. If we depend on news outlets to create our image the emphasis will be on what is dysfunctional and dangerous, not what is beautiful and enriching.

Currently the City Council is debating a proposed budget that drastically cuts the funding to several arts organizations that have been part of that revitalization. Without taking sides in the debate about whether public funds should be used, community support of our arts organizations is critical to enhancing Durham's image and establishing our "brand."

Over at www.DurhamLuxRE.com where I blog on the luxury home market in Durham you can access a report that I wrote that tries to show the Durham luxury market in the context of the whole Triangle. Durham sometimes struggles with a lingering reputation as the downtrodden industrial city that surrounds Duke. This might have been true at one time but no more. Included in the report is a brief review of how the transition took place and some of the truly fabulous things that are unfolding. There are also descriptions of the key upscale neighborhoods in Durham and what makes them special.

Studying the upscale market and how upscale homes in Durham have been marketed has been interesting and a little discouraging. Most listing agents, who should really be called marketing directors to reflect their major responsibility, are used to listing home in a bubbling sellers market where sticking a sign in the yard and getting the listing right in MLS, was as sophisticated as the marketing needed to be. A much more refined marketing mix is required to best position a home to compete in a market where there is over two years worth of inventory to absorb.

For example, most buyers, especially in the luxury market, are not just buying shelter. They are buying a lifestyle. In advertising terms you don't sell the steak, you sell the sizzle. Yet most copy focuses on the house, the bricks and timber artfully put together on a half acre lot. The neighborhood and community amenities are rarely mentioned.

Durham is a great place to live with all kinds of interesting neighborhoods and activities. There's lots of information in the report and in the posts a www.DurhamLuxRE.com. If you are a buyer you can find out some of the things the community offers. If you want to sell a home in Durham, the Luxury Home Report available in the sidebar, expands on topics like the copywriting tip I offered above. If you are a buyers' agent, I hope the reports will make you more inclined to show homes in Durham. If you are an agent listing homes in Durham, I hope you get some ideas for better positioning homes in this pretty cool community.

Long before I was in real estate I was a marketing professional. If you count real estate marketing, and I do, I've been in marketing since 1975 or well over 30 years. A good chunk of that was in banking during the time when retail banking was changing dramatically through deregulation and new technologies. I got started in product development and product management. My communications skills got me my first job but it also required some analytical skills that my liberal arts background didn't provide. So I set off to teach myself. One of the books I picked up was one called Managing by Harold Geneen who ran ITT before it was sold off in pieces by his successors. The basic premise of the book was that the truth is in the numbers. I believed him. The subsequent experience analyzing products and opportunities made me a numbers guy too.

So, one of the things that I started doing right after I got my real estate license and learned how to do MLS searches was to start developing some statistics about the Durham market and some of the sub-segments. I was surprised how little data or analysis was generally available since the Triangle is a good sized market. In 2007 MLS recorded sales that totaled over $6.5 Billion in Durham, Orange and Wake Counties.

One of the sub-segments that caught my attention was the "Luxury" market, which I arbitrarily defined as $700,000 and above. I turns out that the Durham luxury market was one of the very few weak areas in the Triangle real estate market and it has been since way before the recent troubles. Exploring the reasons for this led me to produce a report and create a separate blog on the topic of the Durham luxury real estate market. The report is rather long (14 pages) but meant to instruct rather than befuddle, so it's not a tough read. The report is available for download in a pdf fomat for anyone who is interested at the blog site which is www.DurhamLuxRE.com

I have often expressed my fondness for Durham's "texture" by which I mean that it isn't a carbon copy of dozens of cities across the Southeast. Durham has it's neighborhoods that might not be that much different than neighborhoods in those other cities but the combination of ethnic diversity, high tech opportunity, universities, cultural activities and sports make it pretty special. However, every once in a while a story comes along that illustrates what I mean without mentioning any of these things. The link is to a local blog called BullCityRising by Kevin Davis. I've never met Kevin but his "about me" says that he has only been in Durham since 2005. It also says he has a job which is amazing because he is the most prolific blogger on the good things happening in Durham that you could possibly imagine. This particular post is a dog story. However, if you scroll through the blog you will see some great reporting on the development going on in Downtown Durham, most recently Greenfire's development plans. Over ten years ago I was one of the businessmen on the founding Board of Downtown Durham, Inc. Prior to that I had served two terms as the chair of the Chamber's downtown revitalization committee. Bill Kalkhof was the first and only president of DDI and IMHO should get a lion's share of the credit for getting the ball rolling for the revitalization of Durham's core. Never in our wildest dreams or greatest hopes back then could we imagine some of the stuff that is coming out of the ground now. Still I come back to the heart warming story of tracking down a lost dog as an illustration of Durham at its best. Enjoy. http://www.bullcityrising.com/2008/02/beans-return-a.html

Jay