THE BLOG
12/04/2012 11:51 am ET Updated Feb 03, 2013

Real Estate, Poker and the Humanities

I am going to admit something to you: these websites that have people fooled into thinking you can just hover over a house with your mouse to magically assess its value? You're kidding me. It's not a job for a computer. It's a job for a human. Computers can't touch us. This is a long essay -- I won't bore you. If that's enough for you, here, have a holiday gift guide. If you want to read more, see below.

It can take me a full three hours to comp a house. Sometimes more. And I'm a professional with 10 years experience. Make no mistake about it, it takes a lot of my time. This isn't a bad thing, because A) maybe I get the listing, B) if I do it for a friend as a favor they never forget it and they invite me over for dinner and I like that, and C) it keeps my pencil sharp. If my real estate pencil isn't sharp, I'm toast.

Growing up, my father was in the casino business -- on the real estate side of it. I became fascinated with poker. My dad, stuck in meetings all day, would give me a hundred bucks, and I would sneak into a poker room somewhere, put my headphones on, and grind it out until he was done with his meetings. I loved it.

When I was about 19, I discovered this software called Wilson poker. Very powerful stuff. It comes in two flavors, limit and no limit. For limit, having this tool, was a ridiculous advantage. I used it to load up specific poker scenarios to train myself. I could give myself pocket 10s for example, then assign different hands to different seats and play the game a thousand different ways. By the time I was done, I became a limit Hold 'Em trained assassin. It's a regret of mine now, because let's just say classrooms didn't hold my attention the way a poker table could, and we'll leave it at that.

The no limit version of Wilson software, however, was absolutely worthless. It just was. A real poker player would know that within two seconds. Because no limit isn't mathematical. It's a touch of math, but it's mostly experience and feel.

These real estate websites? I'm going to let you in on a little secret. All they are is Wilson Software -- the worthless, no limit version. They have one piece of data. That's ok, I guess... That's a form of empowerment and I'm not mad at that. But I think they are confusing people more than they are helping, because comping a house isn't limit Hold 'Em. It's high stakes, no limit Hold 'Em all the way. Limit Hold 'Em is like driving an automatic car. It's a piece of cake. No limit Hold 'Em? It's as complex as flying an airplane. They are two different sports.

These websites have aggregated the most basic set of data a realtor uses, i.e. square footage, lot size, etc., and they have that bird's eye view. That's it. If that's all I used to comp a house, you should knock my commission down. Your local real estate agent isn't on top from above. He's in the streets. And he's sick of talking about Zillow at dinner parties. Or at least this realtor is.

My feet have to touch the pavement to comp your house. I can't do it from a map on top. That bird's eye view that tells people what the public records recorded is just one piece of data.
I'm not going to tell you everything I do to comp a house, because I don't want to bore you. But for one thing, I'm in the houses on Tuesdays. So every time I walk into a house, whatever that house is telling me goes into my gut, and I'll use it later down the road. If the house isn't right for a client of mine, I still go in there and pay attention and just "feel the house" a bit with my insides so I can file it in my gut for later.

Then I watch that house on the MLS at night with my headphones on, while the rest of the world is watching Million Dollar Listing (ugh). I watch that house go into escrow, fall out of escrow if that's going to happen, go back in escrow, and then eventually sell. I watch the whole thing. It's like watching a baseball game to me. It relaxes me. The rhythm of this is like the rhythm of a poker table. I can tell by how long it took to go into escrow, and how quickly it goes from looking for backup to pending, and how quickly it sells, everything I need to know about the market. I can tell the whole story of the transaction. It's like watching a movie. If it's moving hot, that tells me one thing. If it's cooling, that tells me another. If you're selling your house, your realtor uses this information when they counsel you about making a price adjustment.

These websites... can't do... any of this. Zillow is bird's eye. I'm in the house. Then I eat lunch right there and I take the temperature of the neighborhood. Are there any new cool stores and restaurants? What's going on over there? How is the traffic? Is the traffic getting better or worse? I drive around. I talk to people. I feel it. This is what your good, hard working, local real estate agent does. We are Angelenos and we control our own schedule for the most part, but we are always "tuned in" to what's going on. Those websites can't touch us. Many, many agents don't do this. Most agents probably don't do it. But the good ones do.
Selling houses in L.A.? That's high stakes, no limit all the way. It's flying an airplane. It has so much texture to it, it's fascinating.

You're at the table, and you're sitting there with your headphones on, and you're just feeling the table tighten up and loosen up. It's all feel. There's nothing I like more. It's no different than watching the real estate market at night with your headphones on. Let's say you have a pair of sevens or something, and there's a flush draw on the board, and the other player is betting into you and putting you up against the wall. What do you do? You take the most base, obvious data (the piece that Zillow can do), and then you use all your tools that you've built up from years in the game. You use your experience and your instincts that you have earned over time at the tables. And you make the call.

For me, houses are cards and cards are houses. It's all the same thing.

Right now? There's no inventory. The table is tight. The interest rates are very low, more people with chips want to get into the game but there's none available. There initials are on the board. It will loosen up, but be patient. Hang tight and be ready to pounce. If you find a house you like, it's a seller's market right now. Bet large or someone's going to come over the top on you.