I’m all in

by Russell Shaw

Mega-Producing Realtor

Author website

I’m all in.

Meeting Greg and Cathleen was good for me too. I really enjoyed the time we spent together. As all of the regular readers here already know they are very cordial and intelligent people. And isn’t that the whole idea for the individuals who congregate here – find people with those qualities to help and be helped by?

I need to wrap up some loose ends – respond to several posts that have been left hanging.

Benjamin wrote:

Hey Russell

I’m with a fairly new (just one year young) Keller Williams office in South Western Ontario, and we currently have the highest average commission out of offices in the area, averaging over 5%. The ‘normal’ commission out here is 5%, and increasingly we’re seeing 4.5 and 4 become normal for listing residential; many realtors in my office still are signing people up at 6% because we do offer more value and service than other firms. Does KW have the perception in the US of being a ‘discounter’?

No, they don’t. KW – from the top down – does not want to be perceived that way. There are KW agents here promoting 4% total commission listings (as there are agents with Re/Max and the company I am with, John Hall & Associates). But those agents are in the minority – advertising a low commission. I personally think that advertising a low commission is stupid and the agents who do it (thinking it will bring them more business) are doing a poor job in the area of strategic planning. They are not thinking very far into the future. 3% is what would be considered a “competitive co-broke” percentage in my market. In a market like Greater Los Angles that number is probably more like 2.5% – based on their much higher sales price. If the listing agent is only getting 1% they have set themselves up for failure.

Listing agents who work that cheap are doomed to failure. Why? Because a successful operation will actually spend more than the failure agent grosses on PROMOTION OF THEIR LISTINGS. It costs money to sell a lot of houses – a lot of money. And if you have no profits you don’t even have the option of spending the money that way because you don’t have it.

Also, another little detail: if you plan to grow (and have a life) you will need to hire more (and more) employees. Many of them will want to be paid.

Some interesting stats (that NAR should have evaluated but doesn’t dare – as it would look like they favored “traditional brokers” over the current crop of leeches);

In 1988 FSBO sales were 20% of all residential real estate sold. In 2005 FSBO sales were down to only 13% of all of the sales. This was the hottest real estate market in history. Dork morons could put a sign in the yard and get a “full price offer” in a matter of hours. And FSBO sales DROPPED to 13%?

What the hell?

That would only make sense if practically ALL of the business that the late-to-the-party-give-no-service-only-bring-a-fork-to-the-picnic-put-it-in-MLS-for-$300 folks came from the FSBO pool. The into MLS for $300 companies business is all coming from the FSBO folks that used to sell it themselves with NO Realtor help. This means that these limited service companies are precisely NO “real” threat to working Realtors. But they are having an effect – via their PR. Most reporters and the news media they work for are dopes who can seldom correctly evaluate relative importances (on any subject).

Good agents do not need to “match” or beat the fees these companies charge – they can just ignore them. If a seller asks for a lower fee, we go out of our way to TELL people about those companies.

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Tyler Sookochoff writes:

“I especially liked his idea that yammering on about “we give great service” is NOT productive – and that no one really gives a crap. You will see what I liked so much if you watch it. ”

I watched the video, Russell, and found Dalton a very interesting/entertaining speaker. I take your above comment to mean that you agree with Dalton that you (as a real estate agent) are in the ‘skills sector’, not the ‘service sector’. What would you suggest are the top skills that an agent brings to the table that cannot be easily replaced by technology? What skills should an agent advertise/promote that are unique to him/her? (As opposed to talking about ‘service’.). Negotiation skills? Marketing skills? Valuation skills?

All three.

Agents who are good are not going to be replaced by Zillow or any other computerized valuation system. All of the people in my office (who work for me) are MUCH better at pricing property than most all appraisers, other agents or any computer. Why? When we don’t KNOW what a house is worth we actually know that we don’t know. And we tell the seller just that. And we test the price and see if buyers will come see it at that price. If not – CHANGE THE PRICE. We follow up on every single showing on every single listing (we’ve taken 565 listings so far this year). Is it expensive for me to offer that service and to do it? Well yes and no – it is a full time job for one of my staff, but it enables me to get homes sold.I am not a good negotiator so I have two people who work for me that are fantastic negotiators. At contract time my clients have the benefit of excellent professional negotiation skills.

Marketing: this one is probably the most important of all. Just for example, here is a partial list of where we market their home. Compare that to the 1% and less listing agents. They can’t compete with us on results (either time on the market or sales price).

On that point – another of the more idiotic ideas that Realtors have bought into (based on the onslaught of “agents are a commodity” communications) is that the house is going sell for the same price no matter who sells it.

If that were really a true statement, “the house will sell for the same price no matter who sells it” – it would actually make sense for almost everyone to sell their own home themselves. Everyone should be a FSBO. Yet the data shows otherwise – the AVERAGE agent sells a home for 16% more than the average FSBO.

Again, this is the average Realtor – sells for 16% more than the average FSBO. And I have empirical data that shows I can sell it faster and/or for more than the average agent. In fact, I would repeat a line I got from Allan Dalton, “No seller needs a Realtor to sell their home – they need a Realtor to sell their home for more”.

So it would seem that who sells it and how they go about it has something to do with the price and how long it sits on the market.