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Serious Question - Your response would be greatly appreciated.
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| My wife is a RE/MAX agent. We both realize the cheese is quickly being
moved in the real estate industry (mainly because of the internet). We
also realize people are getting sick and tired of paying $48,000 to
sell an $800,000 home. We are actually thinking about starting our own
agency that offers absolutely everything a RE/MAX agent offers (or any
"full service agent" for that matter) at a 1% selling fee and of
course a 2.8% to 3% co-op fee (less no agent will show the home to
their buyers). So for my $800,000 home example they would save $16,000
and receive everything my wife provides now. Basically doing the same
thing for less money. This is a different model than traditional
discount agents or help-u-sell etc. They really don't offer full
service. I have to believe with the growing animosity towards the
commissions agents make this will be a welcome alternative. We then
make up for lost revenue by increasing our volume.
Question:
1. Who is doing this now and how successful have they been?
2. What is your opinion of this idea?
If you're a full service agent you probably won't like this post and
I'll get flamed. But you have to admit the cheese is moving.
Thanks,
Don (don't reply by email as it won't work)
| |
| darrenli516@yahoo.com 2006-04-06, 5:21 pm |
| Don,
There are many things to consider with your proposal.
I am an agent with a "full-service " broker.
In my market area(Long Island, NY), discount brokers are having a very
tough time of it making ends meet.
You must consider all the facets of real estate marketing, as well as
your offices overhead and expenses. You'll have to pay for your office
space, supplies,utilities, local realtor and mls fees, advertising,
signs, business permits,etc.
In most instances, charging sellers only a %1 fee to sell will not net
you enough profit to sustain your business.
And what is this co-op fee you'd pay other agents if they sold one of
your listings?
Would your seller pay this on top of the %1?
You might let us know about your market area.
Unless homes in your area sell extremely quickly, it will cost you a
lot of money to keep a listing on the market for a number of months
while continue marketing it.
I just don't believe a discount broker can adequately can successfully
represent a seller while only charging %1.
I just don't think the numbers will add up.
Darren
| |
|
| On 6 Apr 2006 13:14:42 -0700, darrenli516@yahoo.com wrote:
>Don,
>There are many things to consider with your proposal.
>I am an agent with a "full-service " broker.
>In my market area(Long Island, NY), discount brokers are having a very
>tough time of it making ends meet.
>You must consider all the facets of real estate marketing, as well as
>your offices overhead and expenses. You'll have to pay for your office
>space, supplies,utilities, local realtor and mls fees, advertising,
>signs, business permits,etc.
>In most instances, charging sellers only a %1 fee to sell will not net
>you enough profit to sustain your business.
>And what is this co-op fee you'd pay other agents if they sold one of
>your listings?
>Would your seller pay this on top of the %1?
>You might let us know about your market area.
>Unless homes in your area sell extremely quickly, it will cost you a
>lot of money to keep a listing on the market for a number of months
>while continue marketing it.
>I just don't believe a discount broker can adequately can successfully
>represent a seller while only charging %1.
>I just don't think the numbers will add up.
>
>
>Darren
Darren,
Right now we pay ReMax over $14,000/year just for her to have ReMax
next to her name on her signs and business cards. Her new business
would be home based just as it is now. That $14k to ReMax doesn't even
include an office there. She also has to pay for her MLS fees, local
realtor fees, advertising and signs now. So I really don't see a big
expense but I do see saving the $14,000/year we pay ReMax. What you
get for the $14k is 100% of your commissions. Period.
Yes the co-op fees are for the other agent who would be showing our
listing. If you try to low ball on the co-op agents will simply
boycott your listing.
Darren she can easily stay at ReMax and make 100k to 200k per year
after expenses. But we honestly see where the internet is slowly
breaking down one of the last major industries that hasn't completely
changed because of its power. Remember when eTrade first started up.
The big guys on Wall St. just laughed. Need I say more?
ReMax, Prudential, Century 21, Coldwell are all fighting it big time.
They push for legislation that will protect their strangle hold on the
industry and the rules by which it plays. But that too shall change.
So we feel our choice is to either stick it out with the big boys and
go down kicking and screaming or start thinking outside the box. I
remember when people said Wal-Mart couldn't survive because its
margins were simply too small.
Thanks for your reply.
Don
| |
| corky 2006-04-06, 10:21 pm |
|
> Darren she can easily stay at ReMax and make 100k to 200k per year
> after expenses. But we honestly see where the internet is slowly
> breaking down one of the last major industries that hasn't completely
> changed because of its power. Remember when eTrade first started up.
> The big guys on Wall St. just laughed. Need I say more?
>
> ReMax, Prudential, Century 21, Coldwell are all fighting it big time.
> They push for legislation that will protect their strangle hold on the
> industry and the rules by which it plays. But that too shall change.
> So we feel our choice is to either stick it out with the big boys and
> go down kicking and screaming or start thinking outside the box. I
> remember when people said Wal-Mart couldn't survive because its
> margins were simply too small.
>
> Thanks for your reply.
> Don
The internet has nothing to do with selling houses. It may get buyers
interested in seeing your particular home, but closing on a deal takes
skill. That skill comes from an agent that knows selling and knows the area.
An agent can sell only close so many deals and if everything is 1%, no
qualifed person would be insane enough to work that hard for less money.
If you wife absolutely MUST cut her own throat and be a low comission whore,
then more power to her.
When interest rates go up and the market sours, lets see how many deals she
can do at 1% and say afloat.
| |
|
| On Thu, 6 Apr 2006 19:40:29 -0700, "corky" <s022233@admiral.umsl.edu>
>The internet has nothing to do with selling houses. It may get buyers
>interested in seeing your particular home, but closing on a deal takes
>skill. That skill comes from an agent that knows selling and knows the area.
>An agent can sell only close so many deals and if everything is 1%, no
>qualifed person would be insane enough to work that hard for less money.
>If you wife absolutely MUST cut her own throat and be a low comission whore,
>then more power to her.
>When interest rates go up and the market sours, lets see how many deals she
>can do at 1% and say afloat.
>
You're from the old school. You cheese has been moved. Yet you live in
denial. Good luck with that.
| |
| homan4 2006-04-07, 2:21 am |
| "Don" <don@comcast.net> wrote in message
news:llqa32pb5sdkcatkcpin8pabatvub4c3n6@4ax.com...
> My wife is a RE/MAX agent. We both realize the cheese is quickly being
> moved in the real estate industry (mainly because of the internet). We
> also realize people are getting sick and tired of paying $48,000 to
> sell an $800,000 home. We are actually thinking about starting our own
> agency that offers absolutely everything a RE/MAX agent offers (or any
> "full service agent" for that matter) at a 1% selling fee and of
> course a 2.8% to 3% co-op fee (less no agent will show the home to
> their buyers). So for my $800,000 home example they would save $16,000
> and receive everything my wife provides now. Basically doing the same
> thing for less money. This is a different model than traditional
> discount agents or help-u-sell etc. They really don't offer full
> service. I have to believe with the growing animosity towards the
> commissions agents make this will be a welcome alternative. We then
> make up for lost revenue by increasing our volume.
>
I hope you are not naieve enough to think that the companies that offer
discount commissions, limited service, or unbundled services have more to
their business models than cutting fees. It is one thing to cut your fees,
it is another thing alltogether to cut your fees and still make enough money
to keep you in the business.
IMHO discounting fees and hoping to make up the difference in volume is
dumb. What is the point in doing twice the work for the same money? If
your boss suggested you work an 80 hour week for 40 hours of wages what
would you do? Here is my suggestion figure out the value you bring to the
table that others don't and tell your prospects about it a way that
justifies your fee. This is called selling. If you can't sell $16,000
additional commisson based on your value to a seller, how can you sell the
value of a big ticket item like a house? If buyer and seller are $16,000
apart if you couldn't sell that much additional commission to your seller, I
doubt you have the negotiation and selling skills to bring the parties
together. This makes you a high priced order taker. I have heard of more
deals falling apart over a refrigerator or light fixture, and this because
the agents lacked the basic skills needed to succeed in the busness, in
other words they don't know how to sell.
The question your wife needs to ask herself is is she a sales person or an
order taker. The second question she needs to ask is if she is an order
taker, does she want to learn to sell or just cut commissions and continue
taking orders. Lastly, if she wants to be a order taker, she should
consider finding a good discount franchise, so that she gets the whole
business plan, not just the cut the commission part.
Here is another thought, since she already works for a 95% company, she can
continue with the national brand recognition and follow the fee cutting
strategy you mentioned above. If she is not at the point where she is on a
95% plan because it is not profitable for her, don't let her get a broker
license it will be a financial disaster.
> Question:
> 1. Who is doing this now and how successful have they been?
> 2. What is your opinion of this idea?
>
> If you're a full service agent you probably won't like this post and
> I'll get flamed. But you have to admit the cheese is moving.
I don't think the cheese is moving, in fact if you read the book, the cheese
never moved, supplies ran out and the risk takers looked for more. Today in
real estate there are a bunch of lazy agents who can't figure out why they
can't make the big money being order takers, but would rather get paid less
as order takers than take a chance and actually learn and practice the sales
skills necessary to succeed.
If you recall the book the cheese did not move, but rather the story was
about finding new cheese. The market has slowed nation wide, customers and
clients aren't beating down our doors looking for us to help them, we now
have to find new customers, this is called selling.
If you think the cheese is moving, you missed the whole point of the book,
you are making a point of quoting.
| |
| homan4 2006-04-07, 2:21 am |
|
"Don" <don@comcast.net> wrote in message
news:ctmb32tssbp14cmm856cjdvre2u4o4ivpg@4ax.com...
> On Thu, 6 Apr 2006 19:40:29 -0700, "corky" <s022233@admiral.umsl.edu>
> You're from the old school. You cheese has been moved. Yet you live in
> denial. Good luck with that.
In the book, the old school was made up of the ones who said the cheese had
moved. New school goes out looking for more cheese.
Why not reread the book, and stop wining about someone moving cheese.
| |
| homan4 2006-04-07, 2:21 am |
| Here is another great idea, instead of working for less, why not pay people
to let you list their homes for them, and pick up the co-broke out of your
own pocket as well. This way you could do all the work and the seller's
wouldn't complain about commission, except that soon someone would pay them
more than you.
I guess it still comes down to selling skills. Learn to sell and you can
take any listing you want for the commission you want. Aim high and have a
roast duck for dinner, aim low and shoot yourself in the foot. Let your
wife charge customers what she thinks she is worth.
BTW, I am not flaiming you, whatever your wife wants to do is great, it is
just that your limited understanding of the industry has caused you to start
this thread with faulty assumptions. I have never heard of people being
thrilled about paying more, in fact folks always look for a discount. This
is not a new trend, but human nature. If you start with the assumption that
this is a new trend, you are just showing how little you know about selling.
| |
|
|
"Don" <don@comcast.net> wrote in message
news:ctmb32tssbp14cmm856cjdvre2u4o4ivpg@4ax.com...
> On Thu, 6 Apr 2006 19:40:29 -0700, "corky" <s022233@admiral.umsl.edu>
>
>
> You're from the old school. You cheese has been moved. Yet you live in
> denial. Good luck with that.
The topmost producing realtors in this area don't even have websites, or
don't know crap about the ones they have. Realty is a people biz. The
internet does not sell homes. It is just a glorified version of FSBO and we
all know that FSBO sucks.
The cheese is the ability to handle the public and get things signed, sealed
and delivered by the closing date. A stupid website just has a picture of a
home and some bullshit the owner thought up.
| |
| corky 2006-04-07, 10:21 am |
| > If you're a full service agent you probably won't like this post and
> I'll get flamed. But you have to admit the cheese is moving.
I don't mean to be ignorant, but the cheese is not moving and will never
move. Every day I see homes go from FSBO(failed) to discount, cheesy
broker(access to MLS and low %) to finally a realtor that works for money.
Nobody outside of realty understands the nature of this business. Even
people who study realty for a living can't understand why agents get 6%.
This is the FACT:
A website is no different from a street sign or news paper ad; it shows the
potential buyer the property. NOTHING MORE.
A flesh and blood agent will:
Have a strong personality and support the buyer/seller morally and have the
leadership and control to get them over their fears.
Have knowledge of the area and local issues to get a home closed on time.
Will kick the asses of all parties involved to have work and paperwork done
on time. This is no small issue as all agents present will testify. I have
spent hours on the phone for some deals to make sure all of the details are
delt with. This is stressful and many people just give up or lose tempers
and kill the deal.
In short, RE does not sell itself. I think the cheese has move a lot for
businesses that sell electronics, cars and other consumer items. Real estate
is different. I rest my case.
| |
|
| I appreciate all the replies. It is good to hear other views on this
subject. By the way I ran international sales for a large software
company for many years so I do know something about selling. My wife
is quite successful at ReMax and she gets 100% of her commission not
95% as was suggested in an earlier post. That's why she went with
ReMax. My wife is no order taker. She sells and does it well. We know
plenty of order takers. No skill, no follow through, fairly clueless
agents. I'd say they make up 90 to 95% of the agents out there.
Anyway you've made some good point that I'll sit back and consider.
That was the intent of this post in the first place. Didn't mean to
hit so many nerves but sort of figured I would.
Thanks again.
On Fri, 7 Apr 2006 07:16:06 -0700, "corky" <s022233@admiral.umsl.edu>
wrote:
>
>I don't mean to be ignorant, but the cheese is not moving and will never
>move. Every day I see homes go from FSBO(failed) to discount, cheesy
>broker(access to MLS and low %) to finally a realtor that works for money.
>Nobody outside of realty understands the nature of this business. Even
>people who study realty for a living can't understand why agents get 6%.
>
>This is the FACT:
>A website is no different from a street sign or news paper ad; it shows the
>potential buyer the property. NOTHING MORE.
>
>A flesh and blood agent will:
>Have a strong personality and support the buyer/seller morally and have the
>leadership and control to get them over their fears.
>Have knowledge of the area and local issues to get a home closed on time.
>Will kick the asses of all parties involved to have work and paperwork done
>on time. This is no small issue as all agents present will testify. I have
>spent hours on the phone for some deals to make sure all of the details are
>delt with. This is stressful and many people just give up or lose tempers
>and kill the deal.
>
>In short, RE does not sell itself. I think the cheese has move a lot for
>businesses that sell electronics, cars and other consumer items. Real estate
>is different. I rest my case.
>
| |
| Steve Horrillo 2006-04-08, 11:21 am |
|
On 6-Apr-2006, Don <don@comcast.net> wrote:
> My wife is a RE/MAX agent. We both realize the cheese is quickly being
> moved in the real estate industry (mainly because of the internet). We
> also realize people are getting sick and tired of paying $48,000 to
> sell an $800,000 home. We are actually thinking about starting our own
> agency that offers absolutely everything a RE/MAX agent offers (or any
> "full service agent" for that matter) at a 1% selling fee and of
> course a 2.8% to 3% co-op fee (less no agent will show the home to
> their buyers). So for my $800,000 home example they would save $16,000
> and receive everything my wife provides now. Basically doing the same
> thing for less money. This is a different model than traditional
> discount agents or help-u-sell etc. They really don't offer full
> service. I have to believe with the growing animosity towards the
> commissions agents make this will be a welcome alternative. We then
> make up for lost revenue by increasing our volume.
If you are going to offer TRUE full service at 1% more power to you. The big
question is what do you consider full service? What are you going to do for
that measly 1%? As long as you give 3% to the buyer's agent more power to
you IMO. It's when the listing agent's poor negotiating skills or their to
greedy or desperate to walk away and it gets them a 4% commission. Then
rather than taking it out of their own pocket they impair their customers
listing by splitting their loss with the one who's doing most of the work,
the selling agent.
Keep in mind the higher the price of the home the harder it is to sell and
the more time and connections you need. Bread and butter homes sell
themselves. The higher the listing price the higher the commission
percentage should be. Also use the pricing and length of the listing
contract as a negotiating factor. If you take 3 month listing on an $800,000
house that will appraise at only $700,000 and charge 7% or even 4%
commission, you still have NOTHING but a worthless piece of paper. A total
waste of your time and theirs.
Now if yuo take a 6 month listing at 7% and you put in addendum to lower the
price automatically every two weeks by $XXXX and your side of the commission
by X% you're both now in the same boat. They give a little, you give a
little till the job gets done. Also consider resetting the listing, change
the photos and description if it sits on the market too long. Also market to
the buyer's agents via phone, snailmail, fax, voicemail, and email. It's far
more efficient use of your time and money than marketing to the public.
--
Warmest regards,
Steve Horrillo, Realtor / C.Ht.
MLS Training http://BrokerAgentTraining.com
Join EXIT Realty http://over100percent.com
| |
| Diane Plano Realtor 2006-04-08, 1:21 pm |
| Hi, I am a realtor 3 years in the business, fairly successfuly 8
transactions in the past 12 months. I am not marketing myself, just
taking referals from friends and family. I agree that something is
going to change with listing commissions. My sellers know that the
buying agent does the majority of the work when their home sells.
Buyers agents earn every bit of the 3%, but I don't believe that
Listing agents do, and I believe that it will change. The future model
I see is a flat fee or a flat fee with some percentage incentive.
There are a lot of fixed costs to listing a house so I don't think
realtors can make money long term by listing houses, assuming those
fixed fees and then charging a percentage. Because a good number of
sellers are flaky and their houses don't sell. Agents who get 3% are
ok, because they make up that money on other transactions, but that
doesn't work if you only charge 1%. I know a full service discount
realtor here and he quickly changed his model to a flat fee (I think
$500 collected up front) and the rest collected at closing. He
currently has 20 listings in North Texas. He still struggles though
because I don't think he charges enough and he is always adding fixed
expenses like "talking house" and "enhanced realtor.com" and "staging
services". I think you'd have to be really realistic on what expenses
you have to cover. I'm intrigued and I think that the model is
changing but no one has yet come up with a fee model to cover "full
service". Good Luck
| |
| homan4 2006-04-09, 2:21 pm |
|
"Steve Horrillo" <usenet@stephenhorrillo.com> wrote in message
news:qJOZf.556$A41.419@bignews5.bellsouth.net...
>
> If you are going to offer TRUE full service at 1% more power to you. The
> big
> question is what do you consider full service? What are you going to do
> for
> that measly 1%? As long as you give 3% to the buyer's agent more power to
> you IMO. It's when the listing agent's poor negotiating skills or their to
> greedy or desperate to walk away and it gets them a 4% commission. Then
> rather than taking it out of their own pocket they impair their customers
> listing by splitting their loss with the one who's doing most of the work,
> the selling agent.
>
> Keep in mind the higher the price of the home the harder it is to sell and
> the more time and connections you need. Bread and butter homes sell
> themselves. The higher the listing price the higher the commission
> percentage should be. Also use the pricing and length of the listing
> contract as a negotiating factor. If you take 3 month listing on an
> $800,000
> house that will appraise at only $700,000 and charge 7% or even 4%
> commission, you still have NOTHING but a worthless piece of paper. A total
> waste of your time and theirs.
>
> Now if yuo take a 6 month listing at 7% and you put in addendum to lower
> the
> price automatically every two weeks by $XXXX and your side of the
> commission
> by X% you're both now in the same boat. They give a little, you give a
> little till the job gets done. Also consider resetting the listing, change
> the photos and description if it sits on the market too long. Also market
> to
> the buyer's agents via phone, snailmail, fax, voicemail, and email. It's
> far
> more efficient use of your time and money than marketing to the public.
As usual you make good points. Usually the only two hurdles to jump at a
listing presentation are price and commission. The real issue here is
selling skills. A weak agent who has no confidence in his/her own skills
and no clue how to market a home once it is listed usually got the
appointment through a friend relative or a lucky floor call because they
don't even know how to go out and get business. They are more often than
not desperate to get a listing and have no clue the value a good agent
brings to the table. I have been on appointments with agents like this (I
have been there myself when I first started as well) and seen first hand the
embarrassment and intimidation you can experience when the prospect knows
more about an area than you do. Once you reach this point it is hard to
recover control, and the agent usually caves on price, commission or both.
Every day in real estate offices all across the nation hundreds of these
agents come in and do the "victory dance" while waving a folder of worthless
papers over their heads, and high fiving all the other agents. This is a
crazy celebration of lack of knowledge of the local market, and lack of
selling skills.
In this discussion of discounting and unbundled services, your point about
marketing to other agents is most well taken. This is a skill very few in
our market have, and this is one area where a skilled listing agent clearly
earns the value of a higher commission. If you are not spending at least an
hour or two a week networking with other agents in the area, you are not in
the business. Can we say selling skills again?
I think that the reason so many sellers are looking to discount the
commission is that they do not see the value in agents in general and that
most agents do not disappoint their expectations. It seems that most
listing agents have the misconception that you take a listing, do the
victory dance in the office, put it on the MLS, run an ad in the paper, put
a sign up, and the next paycheck is on the way. Listing and selling agents
seem to have the attitude that if you write enough contracts, one is bound
to close.
Why hire an agent in the first place?
1 - Marketing skills - experience marketing homes, knowing where buyers come
from (over 85% of home buyers work with an agent), and how to get these gate
keepers (other agents) to bring qualified buyers to see the property. This
of course includes pricing right, good co-broke, networking skills,
reputation with other agents of making things work, negotiating firmly but
fairly and bringing hard deals to a close.
2 - Negotiating skills - knowledge of contracts forms and terms, of the more
than 70 contracts I have received on my listings in the last six months,
only three or four were completed to the point where I did not have to make
changes for careless omissions, or incorrect math(?). careless filling out
of contracts is a big problem. Making sure all terms are clearly shown.
3 - Transaction management - Knowing and monitoring deadlines and critical
dates is essential. This can save the valuable marketing time if the buyer
misses a date and the parties fall out of contract. Also making sure that
the buyer agent makes sure his buyer is keeping up with his obligations
under the contract. Here is a common example: As a rule here in Florida
all financed property needs a survey. This is because the banks require a
Florida form 9 from the title company, and the title company is required to
review the survey to issue it. I call the buyer agents all the time to find
out if there is a survey ordered, and they always say "I checked with the
bank and they don't need one." Do you know how many agents in my area list
property, and have another agent sell it, and the closing is delayed for a
week or two just over a survey? The fact is as a listing agent I find
myself more often than not doing the buyer agent's job to keep contracts
from falling apart. Repeat this process with inspections, pest
certification, lender issues, title issues, escrow issues, appraisals and
anything else that can go wrong during the contract period, and the time
adds up. As a listing agent I make sure I or one of my assistants are
present for all inspections and appraisals, so I can see the issues before
the buyer agent and help the seller plan a strategy and response when the
issues are raised. Even if there are no issues, you still need to make the
calls and follow-up, and knowing how and when to do it is knowledge and
experience worth far more than 1%, especially in a market with an increasing
inventory.
My opinion if you don't provide the service as a listing agent, charge what
you are worth, if you do provide full service and shave your fee to 1% or
less, ask yourself if you couldn't make more money per hour working at
Burger King.
As I said the reason agents cut commissions is that they don't see the value
of the service they provide. Sadly in most cases they are right.
| |
| homan4 2006-04-09, 3:21 pm |
| "Diane Plano Realtor" <mdgroves@concentric.net> wrote in message
news:1144512435.767529.307390@g10g2000cwb.googlegroups.com...
> Hi, I am a realtor 3 years in the business, fairly successfuly 8
> transactions in the past 12 months. I am not marketing myself, just
> taking referals from friends and family.
I have worked in NY and in FL, and if an agent in any of the four offices I
worked for only had 8 transactions in a twelve month period, after 3 years
in the business, the broker or manager would have had several "back to
Jesus" conversations with them. Especially with the way the market has been
over the last 3 years. In my office to stay active you have to be full
time, and have a minimum of two transactions per month to stay active. Your
perspective might change if you had a broker that required a higher level or
production from you. Or better yet, set your own personal standards at a
higher level and see how your opinions change.
> I agree that something is
> going to change with listing commissions. My sellers know that the
> buying agent does the majority of the work when their home sells.
What do you do as a listing agent to get homes sold? Do you sell the home
owner on correct price? Do you have a plan to market to other agents in the
area? Do you do more than put the listing on the MLS, put a sign in the
yard run a few ads?
> Buyers agents earn every bit of the 3%, but I don't believe that
> Listing agents do, and I believe that it will change.
Speak for yourself. Just because you don't invest the time and effort to
work your listings does not mean that everyone does. If you do put the time
in, than you would know your value.
> The future model I see is a flat fee or a flat fee with some percentage
> incentive.
> There are a lot of fixed costs to listing a house so I don't think
> realtors can make money long term by listing houses, assuming those
> fixed fees and then charging a percentage.
They can make good money listing homes, if they do the work, and charge what
they are worth. When I work with buyers, I generally do not show unlisted
properties because of the risk of not getting paid. I think most good
agents feel the same way.
> Because a good number of sellers are flaky and their houses don't sell.
????????? As a listing agent you should "own" all the problems with the
listing. It is wrong to blame a seller who I have not taken the time to
educate for the home not selling. In the end, problems with listings come
down to a few issues, price, property condition, co-broke, market
conditions, and accessability for showings. If sellers are "flaky" it is
because I as the listing agent have not educated them adequately in these
matters, it is not a seller problem, it is my selling skills that are
lacking. By the way - there are some listings that you should just not
take. If you can't educate a seller to the point where they are pulling
with you instead of against you, don't take the listing, or if you took it
give it back, or referr it to an experienced agent in your office who knows
how to sell.
> Agents who get 3% are ok, because they make up that money on other
> transactions, but that
> doesn't work if you only charge 1%. I know a full service discount
> realtor here and he quickly changed his model to a flat fee (I think
> $500 collected up front) and the rest collected at closing. He
> currently has 20 listings in North Texas. He still struggles though
> because I don't think he charges enough and he is always adding fixed
> expenses like "talking house" and "enhanced realtor.com" and "staging
> services". I think you'd have to be really realistic on what expenses
> you have to cover. I'm intrigued and I think that the model is
> changing but no one has yet come up with a fee model to cover "full
> service". Good Luck
The model is not changing, it is just that sellers are tired of the parade
of retired school teachers, laid off accountants and engineers, unemployed
auto mechanics, and opportunity seekers who think real estate is a great way
of making big money without doing much work. The brokers are really to
blame in that they hire anyone who can fog a mirror, offer no real sales
training, and hope 1 in 10 can figure out how to do the job. This is what I
call the old AMWAY model of recruitment. In real estate 10% of the agents
do about 85% of the business. Perhaps if brokers got rid of the dead wood,
the part-timers and hobbyists, the true value of using a full service agent
would be clearer. Or better yet if agents knew what full service meant, and
actually provided it, we would not be having this discussion at all. When
the number one complaint from sellers is that agents do not communicate with
them, or update them on their property, is it any wonder that the majority
of agents do not see any value to the "full service" they are providing, and
think that sellers are paying too much?
| |
| Steve Horrillo 2006-04-10, 4:21 am |
|
On 6-Apr-2006, Don <don@comcast.net> wrote:
> ReMax, Prudential, Century 21, Coldwell are all fighting it big time.
> They push for legislation that will protect their strangle hold on the
> industry and the rules by which it plays. But that too shall change.
> So we feel our choice is to either stick it out with the big boys and
> go down kicking and screaming or start thinking outside the box. I
> remember when people said Wal-Mart couldn't survive because its
> margins were simply too small.
What you need to understand is buying or selling a home is very emotionally
stressful. A good Realtor would make a good therapist. There's a lot of hand
holding required whether or not the client is willing to admit it to
themselves. That will never change. Trying to undercut the competition isn't
thinking outside the box. Encouraging client participation and input while
charging traditional commission is. Enter the listing with them. Take
interesting wide angle and enhanced photos. Staging. Show them how to create
a buzz among their friends, neighbors, co-workers and family. Teach them.
Have fun with it.
--
Warmest regards,
Steve Horrillo, Realtor / C.Ht.
MLS Training http://BrokerAgentTraining.com
Join EXIT Realty http://over100percent.com
| |
| Steve Horrillo 2006-04-10, 4:21 am |
|
On 7-Apr-2006, "homan4" <homan4@cox.net> wrote:
> BTW, I am not flaiming you, whatever your wife wants to do is great, it is
>
> just that your limited understanding of the industry has caused you to
> start
> this thread with faulty assumptions. I have never heard of people being
> thrilled about paying more, in fact folks always look for a discount.
> This
> is not a new trend, but human nature. If you start with the assumption
> that
> this is a new trend, you are just showing how little you know about
> selling.
Knowingly or not, we teach people how to treat us. If you bring up the idea
of low commissions or any miserly comments you put them in that mode, then
you have to dig yourself back out of the hole you made for yourself. Keep
yours, and their "eye's on the prize." You deserve top dollar and so do the
sellers. The buyer's deserve a nice place to move into as well.
--
Warmest regards,
Steve Horrillo, Realtor / C.Ht.
MLS Training http://BrokerAgentTraining.com
Join EXIT Realty http://over100percent.com
| |
| Steve Horrillo 2006-04-10, 4:21 am |
|
On 8-Apr-2006, "Diane Plano Realtor" <mdgroves@concentric.net> wrote:
> Hi, I am a realtor 3 years in the business, fairly successfuly 8
> transactions in the past 12 months. I am not marketing myself, just
> taking referals from friends and family.
That's what makes MLM so creepy. They have you hit up your family and
friends first. If you knew how to market you wouldn't jeopardize family and
friendship relationships. Doctors and Lawyers typically don't handle family
or friends. Ever hear of "professional courtesy?" Ever wonder why?
--
Warmest regards,
Steve Horrillo, Realtor / C.Ht.
MLS Training http://BrokerAgentTraining.com
Join EXIT Realty http://over100percent.com
| |
| Steve Horrillo 2006-04-10, 4:21 am |
|
On 8-Apr-2006, "Diane Plano Realtor" <mdgroves@concentric.net> wrote:
> My sellers know that the
> buying agent does the majority of the work when their home sells.
> Buyers agents earn every bit of the 3%, but I don't believe that
> Listing agents do, and I believe that it will change.
They know it because you're telling them in one way or another. The one who
finds the seller and get's them to sign on the dotted line rules. If you
think being a listing agent is so easy then why are you handling buyers?
--
Warmest regards,
Steve Horrillo, Realtor / C.Ht.
MLS Training http://BrokerAgentTraining.com
Join EXIT Realty http://over100percent.com
| |
| Steve Horrillo 2006-04-12, 6:21 am |
|
On 9-Apr-2006, "homan4" <homan4@cox.net> wrote:
> Usually the only two hurdles to jump at a
> listing presentation are price and commission.
And let's not forget the length of the listing. All three should be used if
negotiation is necessary. If you're good you'll rarely find yourself in a
position to have to negotiate. Taping myself on sales calls has always been
very enlightening. People's minds are a lot like computers. If you put
garbage in you get garbage out. It's fascinating to analyze my tapes. It
becomes clear how I have unwittingly planted seeds that end up haunting me
in the end. There's a lot of truth in "you reap what you sow." 
--
Warmest regards,
Steve Horrillo, Realtor / C.Ht.
MLS Training http://BrokerAgentTraining.com
Join EXIT Realty http://over100percent.com
| |
| homan4 2006-04-12, 8:21 am |
|
"Steve Horrillo" <usenet@stephenhorrillo.com> wrote in message
news:kX2%f.22012$Sf.3073@bignews6.bellsouth.net...
>
> On 9-Apr-2006, "homan4" <homan4@cox.net> wrote:
>
>
> And let's not forget the length of the listing. All three should be used
> if
> negotiation is necessary. If you're good you'll rarely find yourself in a
> position to have to negotiate. Taping myself on sales calls has always
> been
> very enlightening. People's minds are a lot like computers. If you put
> garbage in you get garbage out. It's fascinating to analyze my tapes. It
> becomes clear how I have unwittingly planted seeds that end up haunting me
> in the end. There's a lot of truth in "you reap what you sow."
>
This too is right on the money, especially with the changing market we see.
Last year our MLS recorded 6658 homes sold. Last time this year there were
less than 900 homes in inventory. This morning there are 3759. This is
almost a seven month supply of homes. Some neighborhoods have an absorption
rate of over a year. Any agent in our area who takes listings for less than
6 months does not understand the market, and is going to crash and burn,
unless he gets the listing for 20% or more below market, Our market has
declined 15% since January on homes and 20 - 25% on vacant land. Not to
worry about these agents, they are the ones who wont be in the business in a
year or so.
| |
| Diane Plano Realtor 2006-04-14, 3:21 am |
| I think I have been misunderstood here. I am a full service agent who
charges 3% to list. I have only had 8 listings because they are high
dollar houses and I only take 1 or two at a time. I practically live
with my clients through their transaction. I don't WANT listing agents
to discount and I believe that full service listing agents play a vital
role in attracting buyers, maximizing the sale price, keeping emotions
in check during a stressful time and of course getting the sale to
closing.
Having said all that, listing a house is not nearly as time consuming
as respresenting buyers. Even the Remax trainers advise that listing
houses is the most cost effective way to build a business and to make
money. ... That's because it's easier than being a buyers agent. And
because of the information available in this new connected age,
consumers are become savvy on every purchase/sale that they make. Real
estate is no exception and sellers are becoming savvy to the fact that
in big city markets, marketing by their agent doesn't generate as many
showings as MLS hits by other buyer's agents.
I believe (but am not advocating) that in the near future consumers
will demand that listing fees be less than buying fees.
Also, I think that the comments on this board don't seem like they are
geared toward an audience of realtors. We ALL know that listing a
house is easier than representing buyers. Why is everyone acting like
they're trying to convince a prospective listing client. One caveat:
I believe that in small town markets, listing a house may even be more
time consuming and difficult than representing a buyer because
generating word-of -mouth marketing really does sell those houses.
| |
| Steve Horrillo 2006-04-14, 9:21 am |
|
On 14-Apr-2006, "Diane Plano Realtor" <mdgroves@concentric.net> wrote:
> Real
> estate is no exception and sellers are becoming savvy to the fact that
> in big city markets, marketing by their agent doesn't generate as many
> showings as MLS hits by other buyer's agents.
Let's throw a whole bunch of crap on the wall and hope some of it sticks.
Look, the number of "hits" are meaningless. What counts is the ONE person
who's going to ultimately buy the home. Any "savvy" seller (or Realtor)
knows quality is better than quantity. If you were a seller would you rather
have 20 people trampling through your house to find that ONE buyer or just a
few? A listing agent's skill comes in the screening process. Not only to
screen out useless buyers but to screen out useless AGENTS. That's one of
the main things a listing agent is being paid for.
> I have only had 8 listings because they are high
> dollar houses and I only take 1 or two at a time. I practically live
> with my clients through their transaction.
I hope you don't think you are doing them a service, "living with them." I
hope you'll rethink your business model and realize you're probably not
managing your time or your efforts efficiently as you could. Try to get the
focus away from serving ego's and on to getting the goal accomplished as
smoothly, efficiently and as quickly as possible.
You of all people in the process need to keep a clear head and not fall into
the inherent drama's that arise when selling a "home." BTW, which is
precisely why once you take the listing you have been taught (hopefully) to
stop referring to where they live as a "home" and start calling it a
"house."
> I believe (but am not advocating) that in the near future consumers
> will demand that listing fees be less than buying fees.
That will not depend on the consumer, it will depend on how many skilled
agents are in the business. If you know what you're doing the consumer will
rely on YOU, the Agent to determine the split in the way that's most
advantageous for them. If you can't position yourself as the expert and earn
their respect then of course you will be paid less. The sad part is so will
the buyer's agent.
> Also, I think that the comments on this board don't seem like they are
> geared toward an audience of realtors. We ALL know that listing a
> house is easier than representing buyers.
One the contrary. That way of thinking is the crux of the problem. Listings
may be less time consuming but in no way are they easier. It's just a matter
of one side requires more, or should I say different skills than the other.
The listing agent is paid for their skill. The buyer's agent more so for
their labor. If you examine any job you will find that the one with the
skill earns more per hour than the one who labors. The laborer will always
think the one with the skills has it made. Has it "easier." Until of course
the laborer becomes skilled and then they too come to understand why they
are getting paid the "big bucks.".
--
Warmest regards,
Steve Horrillo, Realtor / C.Ht.
MLS Training http://BrokerAgentTraining.com
Join EXIT Realty http://over100percent.com
| |
| homan4 2006-04-14, 11:21 am |
|
"Diane Plano Realtor" <mdgroves@concentric.net> wrote in message
news:1144993668.483458.68150@g10g2000cwb.googlegroups.com...
>I think I have been misunderstood here. I am a full service agent who
> charges 3% to list. I have only had 8 listings because they are high
> dollar houses and I only take 1 or two at a time. I practically live
> with my clients through their transaction. I don't WANT listing agents
> to discount and I believe that full service listing agents play a vital
> role in attracting buyers, maximizing the sale price, keeping emotions
> in check during a stressful time and of course getting the sale to
> closing.
I have only "practically lived" with one seller in my entire career. This
was one sale where every issue that could come up did. The buyer was an out
of town broker from NY, and caused every issue and problem imaginable to
come up from (and dare I say this for fear of being flamed by Jay - although
both agents were working as transaction brokers and not as buyer's agents)
procuring cause - he had two realtors in the area submit identical
contracts, to showing up at the closing and refusing to sign unless the
title company took a personal check on an out of state bank for $20,000.
Aside from that I try to keep my time with sellers at a minimum, and update
them with a weekly call, or to schedule and be present at inspections and
the closing. Imagine how much more business you could do if you stopped the
mushy feel good bonding and stuck to business.
> Having said all that, listing a house is not nearly as time consuming
> as respresenting buyers. Even the Remax trainers advise that listing
> houses is the most cost effective way to build a business and to make
> money. ... That's because it's easier than being a buyers agent.
Funny, as a listing agent with over 30 active, pending or contingent
listings, my experience has been that the buyer's agents in my area get a
signed contract, and dump the transaction on the listing agent's door step.
I have been forced to do their jobs, watch contract deadlines, call them and
prod them regarding inspections, surveys and financing. The issue is not
easier or harder. Each role takes special skills and abilities. For
listings if you don't prospect hard, and prequalify your prospects before
you go on an appointment, you end up with pain - in - the - butt sellers
who call you every day complaining that their over priced turkey with orange
countertops and purple shag carpet priced 40% over market. On the other
hand showing agents can waste a lot of gas unless they prequalify buyers
before they put them in the car. Both sides require skills. Just because
someone works hard with no results like a buyer's agent who shows 4 buyers
20 homes each to get one sale, doesn't mean their job is harder, it just
means they waste more time because they don't know how to do their job.
> And because of the information available in this new connected age,
> consumers are become savvy on every purchase/sale that they make. Real
> estate is no exception and sellers are becoming savvy to the fact that
> in big city markets, marketing by their agent doesn't generate as many
> showings as MLS hits by other buyer's agents.
Don't tell me you are one of those lazy listing agents that thinks that all
that has to be done to market a home is to put it on the MLS and let the
other agents do the work? Do you present your listings on the board tour?
Particularly with upper end listings I hope you have a luncheon for the
other agents in the area to network, and I hope you invite as many as you
can personally. How many of the top producing agents in your area do you
know personally, can you put names to faces? What you call savvy is really
stupid, and it is stupid listing agents that don't understand selling. The
reason any company if they sell pipes, electronics or cars hires a sales
person is because of the sales person's skill and network. This is why you
hire an agent. The problem is most agents don't have a clue about selling,
they haven't developed selling skills or networks, and since they are
clueless about their jobs, they are clueless when they try to explain what
they do to as you call them the savvy seller. The extent of seller's savvy
is
that they are wise to the way most agents work.
> I believe (but am not advocating) that in the near future consumers
> will demand that listing fees be less than buying fees.
Is it possible that consumers just want what they are being charged for and
not getting?
> Also, I think that the comments on this board don't seem like they are
> geared toward an audience of realtors. We ALL know that listing a
> house is easier than representing buyers.
Do we? I believe quite the opposite. To take a good saleable listing and
get it sold is a chore. If listing is so easy why do you practically live
with your sellers?
> Why is everyone acting like they're trying to convince a prospective
> listing client.
Perhaps it is because we know what we are doing. Your comments seem to
indicate how little you think a listing agent does. What do you do with the
sellers you practically live with? If you don't see the value of a good
listing agent, it is most likely because you don't have a clue what a good
listing agent does. I appreciate the value of a good selling agent. I know
what a selling agent is supposed to do. You are the one who raised the
issue of what listing agents do and the value of their contribution. The
fact is I am not trying to convince prospective listing clients anything in
this group. You on the other hand seem to think this is just a sales pitch.
For me it is not. The problem in a nutshell is that in order to take a
listing, some agents will say anything and never follow through once the
paper is signed.
> One caveat: I believe that in small town markets, listing a house may
> even be more
> time consuming and difficult than representing a buyer because
> generating word-of -mouth marketing really does sell those houses.
????????????????????????????????
| |
| Steve Horrillo 2006-04-14, 5:21 pm |
|
On 14-Apr-2006, "homan4" <homan4@cox.net> wrote:
> How many of the top producing agents in your area do you
> know personally, can you put names to faces?
I can. Most of them hired me for MLS training. Yet after training Realtors
full time for the last year and a half I don't think I want to go back to
listing. Knowing what I know now I think investing is next on the horizon. I
find very few Realtors invest in what they tell their customers is a great
investment. Why?
--
Warmest regards,
Steve Horrillo, Realtor / C.Ht.
MLS Training http://BrokerAgentTraining.com
Join EXIT Realty http://over100percent.com
| |
| Steve Horrillo 2006-04-14, 5:21 pm |
|
On 14-Apr-2006, "homan4" <homan4@cox.net> wrote:
> The
> reason any company if they sell pipes, electronics or cars hires a sales
> person is because of the sales person's skill and network. This is why
> you
> hire an agent. The problem is most agents don't have a clue about
> selling,
I can show brokers how to set up their MLS system to easily analyze and even
track agent's listings. Yet they don't seem to care if they hire someone who
hasn't had a listing for two years or had bad listing habits. If anything,
they're more interested in how I send out mass email. Is there some sort of
benefit to hiring dead weight that I'm not seeing?
--
Warmest regards,
Steve Horrillo, Realtor / C.Ht.
MLS Training http://BrokerAgentTraining.com
Join EXIT Realty http://over100percent.com
| |
| agsf_57@yahoo.com 2006-04-18, 7:21 am |
| Don wrote:
> My wife is a RE/MAX agent. We both realize the cheese is quickly being
> moved in the real estate industry (mainly because of the internet). We
> also realize people are getting sick and tired of paying $48,000 to
> sell an $800,000 home. We are actually thinking about starting our own
> agency that offers absolutely everything a RE/MAX agent offers (or any
> "full service agent" for that matter) at a 1% selling fee and of
> course a 2.8% to 3% co-op fee (less no agent will show the home to
> their buyers). So for my $800,000 home example they would save $16,000
> and receive everything my wife provides now. Basically doing the same
> thing for less money. This is a different model than traditional
> discount agents or help-u-sell etc. They really don't offer full
> service. I have to believe with the growing animosity towards the
> commissions agents make this will be a welcome alternative. We then
> make up for lost revenue by increasing our volume.
>
> Question:
> 1. Who is doing this now and how successful have they been?
It's like everyone is doing this here in Southern California. It seems
to be a great idea. But then again, success is based on effort.
> 2. What is your opinion of this idea?
In California, you would need a broker's license to do this. I would
also suggest starting a LLC or S Corp in your own state. I also suggest
E&O insurance and if she was in California and has any agents working
for her, she would need worker's comp as well. It's going to cost you
around 5k to get started (new signs, forming a corp/llc, paying for
insurance, and other expenses). Other than that, if she doesn't have
the fear of being on her own, it's a great idea.
> If you're a full service agent you probably won't like this post and
> I'll get flamed. But you have to admit the cheese is moving.
It's actually moving again here. The "Help You Sell" companies along
with websites like www.zillow.com are allowing the average person to
sell their own house. Now can you imagine how this "Help you sell" idea
will explode when the number of real estate transactions drop and you
have an over supply of agents? I predict that you'll see agents working
for a flat low fee to get the business of the FSBO market.
> Thanks,
Regards...
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