Author: Russell Shaw (page 10 of 10)

Mega-Producing Realtor

November 20, 2006

Dual Agency Smack-Down, how about sub-agency?

by Russell Shaw

Mega-Producing Realtor

It has been said that democracy is the worst form of government except all the others that have been tried. – Sir Winston Churchill

Thank you to Jeff for responding SO well to Greg’s points and issues. I do understand Greg’s points and in a perfect world – almost everything he has to say is just fine. We don’t live in a perfect world and I don’t expect to anytime soon. All of the various arguments about single agency seem analogous to a single agent describing how his service is better than mine because he – and he alone – is going to be the only person to respond to his buyer or seller. When they deal with me it is set up more like an assembly line – with different individuals taking care of each of the different aspects of taking care of the client.

Who is right?

Well if the single agent has only the one customer or client and is willing to devote all of his time to that client, then he is right. I’ll not spend a lot of time pointing out how this is not a viable business model.

If that same agent has just one additional client or customer he now can “have a conflict” concerning his two clients. Say client # 1’s house just got a sign call and there is a buyer who wants to see it right now – and client # 2’s property just had an offer written on it and the other agent wants to present that offer right away. The single agent is only offering single agency to both of those sellers so he does not need to worry about agency conflicts.

Just add one new customer into the mix and there is the potential for conflict. So, why do I bring up SUB AGENCY? Isn’t it the most awful thing to ever have happened in the history of the world? Not really. And you might be surprised at what actually killed the beast – it wasn’t the “single agency issue”. I am blessed to live in Phoenix (for a vast number of reasons) Read more

November 19, 2006

Dual Agency Smack-Down: More endless agency

by Russell Shaw

Mega-Producing Realtor

First, as much as Jeff and I genuinely like Greg and appreciate his having us here in his cyber home – he is simply wrong-headed about all this agency stuff.

I don’t believe that Jeff is an angel and I know I’m not. But single agency is not a viable business model. Period. A viable business model is one that would allow for unfettered growth (as long as it was filling a need to the consumer) and single agency is not possible if a company grows.

I remember having an attorney for my client (he was a home seller) and when gave him the “Consent to Dual Agency” form to sign he handed it back and said he would not sign it. I asked him if he wanted his home sold for the highest price in the least amount of time. He answered “yes” that he did. I then asked him if he would like me to refuse to show his home to any of the hundreds of past clients of mine who might want to buy a house like his and if he would also like me to put in the MLS comments that NO JOHN HALL AGENT MAY SHOW OR WRITE AN OFFER ON THIS LISTING?

As he was a lawyer and did understand exactly why I asked him those questions he took the form from my hand and signed it.

There are about 925 agents with John Hall & Associates. It would be quite stupid to preclude them from showing a listing so the seller (and buyer) gets the “benefit” of single agency. What drug do Realtors take (and the lawyers and judges) that makes them even think that THEY control what the buyer or seller are going to do?

The argument I just love is the price issue. Go ahead and make all the low-ball offers you want. “Help” your buyer by writing loads of them. Try it on one of my listings and see how much it “helps” your buyer. I find that most buyers and sellers have a pretty good (and firm) idea of what they will pay for a Read more

November 19, 2006

Redfin Again

by Russell Shaw

Mega-Producing Realtor

Trevor Smith writes (and I respond):

Your comment about Redfin is not only ignorant it is probably borderline libel.

Please feel free to pass my comments and my contact information along to them.

Do you even know exactly what services Redfin does or does not provide?

No. What I do know is that they are attempting to build a business model based on the buyer finding the house themselves (in many cases seeing it via the listing agent) and then going to Redfin to have them write the contract.

Redfin is not doing much less than your typical traditional agent, and they are providing their customers thousands in refunds… hmmm sounds like a great business model to me.

In most states there is a little issue called procuring cause. Here is how Redfin handles it – per their website.

If you are referring to the fact that they do not show their buyers prospective properties, this is no longer true either. So, as far as I am concerned, praise God for Redfin and other discounters who are awakening America to the fact that REALTORS are overpaid.

Your email address would seem to indicate that you ARE an agent with John L. Scott (known to be a highly successful and very reputable full service company) so truthfully, I do find it a bit odd that you choose to praise God for Redfin.

The part that would not align with your own long term survival is your belief that Realtors are overpaid – if in fact, you are one. The FTC monkeys (I believe I originally referred to them as “Howler Monkeys”) share your belief – so you aren’t alone on this point. Additionally, you state that Redfin isn’t doing much less than the typical traditional agent. Yes they are – they are not really performing the vital functions of any traditional buyer agent: taking the customer from the initial contact all the way through to the closing. They are asking the buyer to go and find the house and then “give us a call and we will write it up for you”.

I have no quarrel with any agent Read more

November 18, 2006

Dual Agency Smack-Down: An Argument FOR Dual Agency – part 1

by Russell Shaw

Mega-Producing Realtor

This is a stupid subject. This is a necessary subject. There are a lot of different viewpoints on this subject. A lot of the viewpoints that seem to matter came from lawyers, court decisions (judges who are also lawyers), and other people who are also wrong.

Back in the days when it was sub-agency only and I took my sister, Diane out to find her a house to buy I was representing each and every one of the home sellers whose property I showed to my sister. I was not legally representing my sister, Diane – I was legally representing various random strangers (most of whom I never even met). Did it make sense back then to have it be required by law for me to disclose my relationship with my buyer to “my seller”? Yes. Today, agents are still required to disclose their relationship to the buyer? Why? Who is now being protected by this disclosure? If I take a listing now to sell Diane’s house am I going to give her “better agency” than I do my other clients? But I still have to put in the listing my relationship with Diane. Same deal if I were to sell her a house today. But today she would be my “client”, either as a buyer or as a seller. Who we represent is already a disclosure issue. This is just one example of the nonsense that passes for “important agency issues”.

The seller used to pay all the commissions directly. The listing signed by the seller via the listing broker required the seller to pay them – but that payment went directly (in a legal sense) from the seller to the respective agents (via their brokers). This was changed here in Arizona some years back to having the listing broker being made responsible for paying the selling (cooperating agent) bringing the buyer to closing. This was designed to prevent the seller (and / or buyer) from including the agents commission amounts as part of their offers or counter offers.

So I list a house and the seller agrees to pay me “X” amount Read more

November 16, 2006

I’m all in

by Russell Shaw

Mega-Producing Realtor

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 Read more

November 13, 2006

This is not to suggest that all Realtors are “professionals”

by Russell Shaw

Mega-Producing Realtor

Electronic Mind Control The well informed and logical Kaye Thomas wrote:

It never ceases to amaze me that REALTORS are blamed for prices going up and down in the real estate market. Really, do you think if we had that type of power the market would be where it is now?

Here’s a secret known only to greedy, unscrupulous REALTORS we have nothing to do with the ups and downs in the real estate market. Buyers and Sellers are responsible. Buyers actually have more power then sellers. Basic market principles of supply and demand determine the market not agents. In the current market Buyers stopped buying when they determined that prices had gone too high. You can’t sell something if no one is buying. Sellers have two choices. Take their property off the market or reduce the price to a point that a Buyer finds value.

Believe me if I could “make” someone buy or sell real estate whenever I wanted I would make Bill Gates look like a pauper. I would be in my private jet somewhere between Maui and Hilton Head and would always be playing golf on the best courses in the world.

Then “Pop” rudely responded with the following:

Your statements are lies. Clients generally have day jobs, and rely on professionals for good advice when making a purchase. Realtors don’t disclose, and most clients don’t realize, that increases in transaction volume and transaction price are the realtors lifeblood.

Realtors generally are more than willing to recommend financing sources, especially for that sub-prime buyer.

Realtors also advised their clients during the multiple contracts spending spree of the past several years. Statements like, “Real estate never goes down.” or “You’d better get in before you get priced out” have strongly contributed to buyers decisions to over-extend themselves. After all, to the average schmuck, Realtors are the experts.

Realtors certainly know appraisers that will make sure the property meets or exceeds it’s finance target.

And, most importantly, Realtors (being in sales) certainly have a ripe understanding of the role that emotion and buyer psychology have in setting a price point. Appealing to greed and fear at the margins of the Read more

November 9, 2006

Zip Realty and a Press Release

by Russell Shaw

Mega-Producing Realtor

It never ceases to amuse me (amaze me?) what the press finds “interesting” for a real estate “news story”. Of course it is totally predictable what Inman News finds newsworthy – hacking away at Realtor commissions. Brad Inman has been on a mission from God on this issue for some years. So please don’t get the idea that only obviously crazy people are the only ones working on this vital issue. Here is a link to post I made on Inman’s blog last week. If you are interested, here is the link to the video on CAR’s website. Allan Dalton’s comments, especially the stuff in the last twenty minutes, are well worth any Realtor’s time. 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. The first part is quite boring but once Allan starts to talk – turn the volume up and listen.

Zip. A stupid name? I think so. But damn are they good at using the press! Here are some numbers they just released:

ZipRealty Inc. (Nasdaq: ZIPR) today announced third-quarter net income of $600,000, down from net income of $2.9 million in third-quarter 2005. For the first nine months of the year, ZipRealty reported a net loss of $386,000 compared with net income of $2.57 million for the first nine months of 2005.

The company employed 1,747 ZipAgents as of Sept. 30, compared with 1,383 at the end of third-quarter 2005 and 1,669 at the close of second-quarter 2006.

ZipRealty also announced that the total value of real estate transactions closed decreased about 11.8 percent in the third quarter to $1.2 billion, compared with $1.36 billion in third-quarter 2005, while the number of transactions closed fell 6 percent to 3,467 compared to the same period last year.

Please keep in mind this is a NATIONAL company. In my area (greater Phoenix area) there are privately owned real estate companies that have better numbers than Zip.

Local companies here that have about that many agents (just here Read more

November 8, 2006

The Antisocial Personality

by Russell Shaw

Mega-Producing Realtor

A not very nice person who calls himself “candybags” wrote the following:
“You all need to either get real or get off that high horse of pomposity you rode in on. Comparing a Realtor with a surgeon??? what next?? Auto appendectomies indeed! Who do you think you are kidding? You are lowly paper pushers compared to doctors and lawyers who had attended YEARS OF SCHOOLING PEOPLE to get what they have. They didn’t take an online course and sit an easy written test of 150 questions. I am sick of reading about parallels between doctors and Reel-torrrrs. The old adage is alive and well – no one thinks more highly of a Reeltorr than the Reeltorr himself. Perfect. Get real. Be prepared to be disintermediated. Dinosaurs. I won’t be paying no stinkin 6%,5% or even 4%. Try 3%. IT WONT BE LONG NOW. ”
__
I don’t compare myself to a surgeon except in the income department – I make more than they do. I don’t think I am kidding anyone. You can think of me (and other Realtors) in any way you like (lowly paper pushers). I neither need nor want your approval. If you live in the Phoenix area you would not be able to pay me any amount, because you are exactly the kind of person I choose not to do business with – and if you somehow snuck in under the radar, rest assured, I would have spotted you anyway and cancelled your listing.
No matter what you write or where you write it I am going to go right on surviving quite nicely – as are all of the other Realtors. Further one of my primary objectives – why I am here posting at all – is to let the rest of the real estate community know that people like you (I’ll be much more specific in just a bit) should just be avoided, no matter what fee you would be willing to pay. So thank you for getting me to make this post at this time.
80% of all of the people in the world are Social Read more

November 8, 2006

How much commission should an agent charge?

by Russell Shaw

Mega-Producing Realtor

Theoretically any company could “take over” almost any market by offering their services at a lower price than any of the competition. And sometimes economic theorists like to calculate just how long it is going to be until it happens in various industries. Usually those calculations are just exercises with a financial calculator or spreadsheet – they don’t tend to reflect much in the real world.

Specifically, I remember when Sears bought Merrill Lynch Real Estate and then Merrill Lynch went on a buying spree of real estate companies – one large local firm they purchased was Tom Fannin Realty (this was in the early 80’s). The buzz coming down the pike at that time was that only the VERY largest firms and small (really efficient boutique type operations) would survive. All of the “regular” real estate companies were going to go out of business. The big-money-wall-street-people were going to dominate the real estate industry.

As luck would have it, just doing number crunching (completely skipping the whole “people thing”) made almost everything they (along with all the robot reporters) predicted to be pretty much complete crap. A few short years later Sears was selling (after enormous losses) Merrill Lynch Realty and surprise surprise – the real estate business rolled on, almost like it had all along.

In any industry there are those consumers who believe that “the lowest price” is the most important issue. They constitute about 15% of the home selling public. About 5% fall into the status conscious arena and actually want to pay a higher price. The vast majority of the public (80%) are more “Value Shoppers”. Don’t confuse that for wanting the lowest price all the time. They want the “best deal” – which may or may not be the lowest price. Show them that something is a “good deal” and it doesn’t have to be the lowest price.

One of the more idiotic assumptions made by the howler monkeys at the FTC and the DOJ in their pursuit of “lower commissions for the public” is that “commissions should have come down because of the internet”. The mere fact that Read more

November 5, 2006

More on taking listings

by Russell Shaw

Mega-Producing Realtor

Greg,

The issues in your post that really caught my attention were trying to become a lister as a new agent and finding much more early success working with buyers.

As many real estate instructors are failed agents, even the very best of intentions – trying to give new agents the best advice possible, winds up with some “almost useful” info.

Yes, listers last. But if a new agent starts off as a lister (non friends or family appointment) they have just stepped into the ring against a possible heavy weight champion. They then can get the idea that the only way to compete is with a lower commission. (I promise to cover the subject of defending commissions in much more detail in a later post).

But far more important is the prelisting package (EVERY lister MUST have one) and the listing presentation itself.

There is a big difference between working with buyers than in working with sellers: buyers are usually not looking for an agent, they are looking for a house. For example, most people who are going out to buy a car probably wouldn’t be thinking, “gosh, I hope I meet a really nice car salesman today” – they want information and are possibly willing to talk to the salesperson to get it. Initially, buyers for houses aren’t much different. It is the relationship building skills of the agent that makes them successful when working with buyers.

The ability to get and keep customers is the senior skill with both buyers and sellers but the specific skill set is a bit different with each group. Working with buyers is basically relationship-based selling. It is for this reason that a relatively new agent can be perceived by a buyer as being just as desirable to work with as a highly successful veteran agent. What the buyer wants most of all is someone who will be totally honest with them – so getting them to like you and trust you is THE primary thing.

Unlike most buyers, the typical seller IS looking for an agent. However some of them don’t want to have to pay Read more

November 5, 2006

Ardell DellaLoggia didn’t write this!

by Russell Shaw

Mega-Producing Realtor

She did, however, write this post on raincityguide. Nice person that she is, she also took the time to write and welcome me to the blogosphere. And after reading her post, Real Estate 101 – Improving on “the basics”, I have several things I want (need?) to say.

Observations:

1. Ardell finds it quite easy to bond with her clients and for them to immediately recognize her as a nice, honest and professional person.

2. She – like all top successful agents is quite good at establishing someone’s level of motivation to buy or sell. Further, she has developed a workable system (she probably thinks of it as a “knack she has”) for detecting and routing nuts (crazy people).

3. Her “care factor” is quite high. She likes and truly enjoys helping others and making sure things “go right” for herself and others is quite important to her. Her ability to actually make things go right is very very good.

Why am I writing all of this about her, you ask? She and I have never met.

Because everything she wrote is completely workable and valid for agents everywhere, just so long as they are – each and every one of them – just as nice, as intelligent and as caring about others as Ardell. But if any of those agents don’t have each of the above qualities and virtues she obviously has – I see failure in their future.

On point number 1. above, I don’t believe that the average buyer or seller thinks of the average Realtor the way I described Ardell. NAR publishes our “improved rankings” in the Gallup Poll every time we get a slight improvement. Set aside the “we are up 3% in the polls” crap and you could just as easily say that the average buyer or seller is hoping to find the agent who will lie to them the least. So, unlimited credibility isn’t in the new agent’s arsenal. Most sellers (who aren’t family or friends of the new agent) may not instantly be moved by the agent’s opinion of value. I believe it is possible for the new listing agent Read more

November 4, 2006

Thank you, thank you, and thank you!

by Russell Shaw

Mega-Producing Realtor

Thank you, thank you, and thank you! What a welcome. Just goes to show what a difference having an audience makes when it comes to doing a show. I had tried blogging before, but the only people reading it were friends of mine (who weren’t Realtors). Strange, I know – as the past few years you could almost ask anyone you met if they were a Realtor yet. If the United States has finally achieved the level of 300 million people and 1.2 million of them are Realtors (members of NAR) it would look like there is one licensed agent member of NAR for every 250 people in the U.S. This includes children.

If we excluded children and only figure the probable number of people who maybe could buy or sell a house is around 175 people for every Realtor. If the average turnover rate of the average neighborhood is about 8% and all sales were done through Realtors (they aren’t) this would be about 14 possible sales a year per Realtor. Coldwell Banker for example has national averages of about 10.5 homes per year per agent (same numbers for John Hall & Associates). Take the average sales price and what might be an average commission, less the splits to the broker and you this isn’t a lot of money per agent – as they all have business costs (car, gas, board dues, and advertising) to come out of that.

The average net income of an agent really isn’t very much money. For the most part, selling houses isn’t what would be called “creative selling” – which is to say that almost all of the sales would occur or not regardless of who is in the real estate business in any particular area – it isn’t the agent who is causing the sale to occur. That buyer or seller already had a need and decided to hire someone. So almost every time an agent makes a sale (listing or selling side) they “took” that sale away from some other agent. This is true even if the client never spoke to any other Read more

November 3, 2006

What word needs to get out?

by Russell Shaw

Mega-Producing Realtor

Thank you, Greg! That was such a flattering (and nice) introduction – now I have to eventually write something useful or at least interesting or I’ve let you down. I really appreciate you making room for me like this here on your blog – that is very generous of you and it is my intention to have you glad you did this.

I originally wound up looking at your blog due to an article I read on Inman News about Zillow. What you had to say regarding Zillow was more insightful and relevant than just about anything I had ever seen on the subject. So I am a fan of yours.

It is my hope that I can provide that same level of insight to your readers on the subjects I write about here. I have been interested in writing a blog ever since reading the wonderful book, “Blog”, by Hugh Hewitt. I was particularly impressed when I read that blogs made it impossible for the Main Stream Media (MSM) to continue to control what was to be considered “news”. Owning a printing press and buying ink by the barrel was no longer a requirement for getting the word out.

What word needs to get out?

Several: For example there are many functions that the National Association of Realtors (and the various state and local associations) do a wonderful job of handling. There are other areas where the “handling” is awful or simply non-existent. Any real estate media I’ve ever seen (Inman News, RIS Media, Realty Times, etc) all have deals with or sell advertising to the very people they maybe should be “reporting on” – or like Inman, have such a specific agenda (I can’t really call it hidden) that for the most part they are either bought and paid for or are nothing less than enemies of working Realtors.

All of the various companies, individuals, programs, lead generation services, lead generation websites, coaching services, seminars for Realtors, etc. that all seem to be saying to every agent in existence, “sign up for “brand X” and achieve unlimited success. Are they all really telling the Read more

Author: Russell Shaw (page 10 of 10)

Dual Agency Smack-Down, how about sub-agency?

by Russell Shaw

Dual Agency Smack-Down: More endless agency

by Russell Shaw

Redfin Again

by Russell Shaw

Dual Agency Smack-Down: An Argument FOR Dual Agency – part 1

by Russell Shaw

I’m all in

by Russell Shaw

This is not to suggest that all Realtors are “professionals”

by Russell Shaw

Zip Realty and a Press Release

by Russell Shaw

The Antisocial Personality

by Russell Shaw

How much commission should an agent charge?

by Russell Shaw

More on taking listings

by Russell Shaw

Ardell DellaLoggia didn’t write this!

by Russell Shaw

Thank you, thank you, and thank you!

by Russell Shaw

What word needs to get out?

by Russell Shaw

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