There’s always something to howl about.

Author: Russell Shaw (page 8 of 10)

Mega-Producing Realtor

What’s Wrong with zipRealty?

Some readers here may be a bit concerned that some of the writers here on BloodhoundBlog don’t find and report enough negative comments about various discount real estate companies. Relax. There is more.

I received the following email today from Dave Marron. As you will see, he is a former executive for Zip Realty.

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Hi Russell:

I saw that you posted on bloodhound about zipRealty awhile back. Did you see their earnings release the other day? I’m an ex-zip exec (and ex-KW broker) and I put my thoughts down on paper about the state of their company (see attached). Do you have any use for this? If not, it’s OK. I just thought I’d shoot it over to you in case you thought it was bloggable.

Thanks,

Dave

What’s Wrong with zipRealty?

Last week zipRealty released their “preliminary” fourth quarter results. I’ve been interested in this company since 1999 when I went to ZipRealtylogowork for them. I
spent over four years at zip performing numerous jobs including VP of Sales. A couple of things popped out at me during their “preliminary” earning release conference call that just don’t make sense. Here are my observations.

One of the initiatives zip’s leaders gave for how they are going to improve in 2007 was an increased effort on training. Stock analyst Wendy Snow asked the team what they intend to do differently in the training arena that will make a difference in 2007. To this, Management answered that their “ideal candidate” would have the qualities of a strong trainer and strong real estate skills. They’ll also consider someone with strong training skills who could be “pick up the real estate craft quickly”. Are they kidding? They would hire a trainer who can “pick up the real estate craft quickly”. Would Pilsbuy, Madison and Sutro hire a legal trainer who could pick up the law craft quickly?

After leaving zipRealty I sold real estate for several years and I’m now an owner in a real estate technology company. The way that I learned the “real estate” craft was by going out and selling lots of homes. It’s not something that you can teach someone to Read more

Sales Success Training?

Stack of $100 bills - smallerMost of the national real estate sales trainers training today are selling worthless crap. Want proof? Buy their stuff and see if you can apply any of it and actually make your business better.

Most of the real estate magazine articles that are chock full of “what agents ought to be doing” are written by well intentioned people who either were never successful at selling real estate for a living or never did.

One of the most high profile agents in the world endlessly promotes that he will share (if you sign up for his fabulous training program) how he became so successful. He is quite successful and it would seem logical that he could share quite a bit that would help. One of the main things he “shares” is a cluttered looking clone website that you can buy from him. I’m not quite sure how that website helped him so much as he was fantastically successful before the internet existed.

One trainer (rhymes with fairy) knowingly lies from the stage.

Most agents who enter the business (13 out of 14 by actual count) will be gone in a year or two. Can that be changed by “learning about success”? I really doubt it, as most of them didn’t have much commitment to ever really apply themselves. But that doesn’t include everyone – there are a LOT of people in the real estate business who want to do better and aren’t sure what to do next.

I’m planning on doing something about that. Over the years I have figured out what is involved – exactly – to go from “0 – 60” and I also know what is not involved. We are going to make that information broadly available. Free. Free, in the sense that we won’t be charging any money for any of it. Period. We won’t be endlessly attempting to get new people to listen to the audio or watch the videos because it makes us more money. Our only goal will be to see Read more

Is Now The Time To Move Up?

Nicole writes:

We have a great, 6 bedroom house in Gilbert. I’ve found a “perfect” (floorplan and upgrade-wise), new-build in Mesa with more square footage and a marginally bigger lot. We figure we could sell our house for perhaps over the price of the new place. My husband is hesitant because he thinks our current house will not sell in this slowed housing market. I say now is the time to move up. What do you think? -Nicole

Based on the facts presented, I think that I am going to agree with your husband.

Are interest rates (historically speaking) quite low? Yes. If one was going to buy a home in the near future in the Phoenix area, would now be better than later? Again, yes. But part of your question includes the concept of selling your present home for a price equal to or greater than what the new home would cost. Unless you planned on paying MORE per month or more out of pocket it does not look like you can make the move at this time. The data you’ve provided is quite limited but you have also included that you like the new home more than you like your present home. So … it looks like the price range you are thinking your present home will actually sell in is not correct. If the new home is somehow “better” than the one you are in then it will sell for more than the house you are in now. The only way this would not be true is if you are making a significant trade down in the quality of the neighborhood. This does not even take into account that your closing costs, buying and selling with commission will be at least 10%. Which would mean that if your current home was worth the same price as the house you were buying you would still need to come up that amount in cash or wind up with a loan that was at least 10% more than the one you have now.

I’m not trying to stop you from getting what you want, just Read more

What Is Intelligence, Anyway?

I just received this in an email from a friend. I liked it so much I wanted to pass it along here on the blog.

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What Is Intelligence, Anyway?
Isaac Asimov

What is intelligence, anyway? When I was in the army, I received the kind of aptitude test that all soldiers took and, against a normal of 100, scored 160. No one at the base had ever seen a figure like that, and for two hours they made a big fuss over me. (It didn’t mean anything. The next day I was still a buck private with KP – kitchen police – as my highest duty.)

All my life I’ve been registering scores like that, so that I have the complacent feeling that I’m highly intelligent, and I expect other people to think so too. Actually, though, don’t such scores simply mean that I am very good at answering the type of academic questions that are considered worthy of answers by people who make up the intelligence tests – people with intellectual bents similar to mine?

For instance, I had an auto-repair man once, who, on these intelligence tests, could not possibly have scored more than 80, by my estimate. I always took it for granted that I was far more intelligent than he was. Yet, when anything went wrong with my car I hastened to him with it, watched him anxiously as he explored its vitals, and listened to his pronouncements as though they were divine oracles – and he always fixed my car.

Well, then, suppose my auto-repair man devised questions for an intelligence test. Or suppose a carpenter did, or a farmer, or, indeed, almost anyone but an academician. By every one of those tests, I’d prove myself a moron, and I’d be a moron, too. In a world where I could not use my academic training and my verbal talents but had to do something intricate or hard, working with my hands, I would do poorly. My intelligence, then, is not absolute but is a function of the society I live in and of the fact that a small subsection of that society Read more

I Told My Agent About The House I Wanted To Buy

Rob wrote:

After moving to the area and looking around at properties for a while, I saw one place I was interested in and contacted the seller ‘s agent directly. She agreed to show me the property, and since she was located out of town encouraged me to find a local agent who could show me more things in the area. After looking for a while with another agent and not finding much that I was interested in, I told him about this place that I had already seen and we went and looked at it together.My question:
-Is there any reason that my agent would like me to buy another property instead of this one? Is the sellers agent entitled to more of the commission? I get the impression that he was hesitant to show me this property again and that he is trying to steer me toward other places.
-Also, would it be unreasonable to ask that he reduce his commission since I was the one that found this place?

I just saw the excellent response from Doug Quance, after writing this one. Decided to go ahead and post mine too – as my answer is a bit different.

Rob, the issue your current agent seems to be concerned about is called “Procuring Cause” – who was the “reason” you chose that particular property. Based on my understanding of how it works – and would be enforced if a subsequent agent were to interfere with an existing relationship – your current broker doesn’t have much to be worried about. There is a vital component of procuring cause that is not evident here and that is usually referred to as an “uninterrupted chain of events“. Also, taking into consideration the fact that the listing agent encouraged you to get your own agent, my take on this is it would be totally alright for your current agent to write the offer on the house you want.

I wouldn’t have any way of knowing what the listing agent’s commission would be if she wrote the offer or if it was written by another agent, so can’t answer that Read more

NAR & DOJ – Russ & Russell Part 2

Russ Cofano responded:

Russell,

I appreciate the opportunity to chat with you on this subject.

First, my comments should not be taken to mean that I support the DOJ’s position and hope that they win. Nor do I necessarily support the NAR position with its rulemaking. As I have said before, I do support innovation and think that brokers need to spend more time finding new ways to deliver value to consumers.

Second, let’s define a couple of terms.

“Broker” means any person or firm that has been licensed as a real estate broker under applicable state law.

“Traditional Broker” means a Broker who either directly or through agents, actually assists buyers and seller with buying or selling a home.

Third, this is a VERY long post and I apologize in advance as I usually don’t like posts of this length. Proceed with caution and a good cup of coffee…. )

Regarding the definition of MLS Participant, you said:

“And that is the most logical definition possible under the circumstances. It is important to keep in mind what the MLS actually IS – a communication system set up by brokers for offering and accepting offers of compensation…..to fail to define a real estate broker (the only people ever originally intended to have access to the MLS) any other way than someone who is actively working with buyers and sellers makes no sense.”

Here is the problem from the DOJ’s perspective. Before this rule change, a licensed Broker could join the MLS and open up a store front with no intent of helping a seller sell or a buyer buy. They could call it “Referral Realty” and have full access to the MLS database for purposes of cultivating potential buyers to refer on to “traditional” brokers in exchange for a referral fee. This is allowed by most state license laws. In fact, this type of situation occurs today in some areas where retiring licensee hang their licenses with a Broker in hopes of leveraging their referral base despite having no intent to actually assist a buyer or seller. The problem with this business model is that the referral business Read more

In a Rent vs Buy Bind Right Now

Eric writes:

Hi Greg!

I am writing because I really enjoy your blog. I’m licensed, but haven’t worked with realty in years due to being back in IT (which you also seem to have a passion for), so I enjoy hearing from the experts. I’m in a rent vs buy bind right now. I have someone that can help with a rent-to-own (agreement for sale I believe?) situation, but the main reasons I have for buying a house is that I can take deductions for home office and mortgage interest.

Owning is several hundred more, but temping. However, if during this rent-to-own deal, I’m not able to take those deductions.. I think I’d prefer to save the money, rent something equally as nice, and watch the market, rates, and my credit very carefully.

Are you familiar with this? I see plenty of rent-to-own/lease option etc. wording on craigslist rentals, but do you know if the tax man allows you to take deductions on places you are “renting to own”?

Appreciate any feedback, have a GREAT week πŸ™‚

Eric

Hi Eric, Russell here. The Ask the Broker questions get passed on all of us – so I’ll toss my hat into the ring on this one.

It is my understanding – and also logical, if you think about it – that you can only deduct the interest if you are actually paying the interest. With a rent to own agreement you aren’t liable for the interest, aren’t actually paying it and therefore can not deduct it. So, based on your question, you would be better off renting. But that isn’t the only reason you would be better off renting. There is probably some exception to just about any financial “rule” one can write and I’m sure there are some who will disagree with what I’m about to say here – but I’ll go ahead and say it anyway.

Combining a lease with a purchase agreement is, for most people, the worst of all possible worlds. If you are the tenant/buyer you usually wind up paying more in rent than you ever would if you “just rented”. As most agreements of that Read more

NAR & DOJ – Russ & Russell Part 1

Russ Cofano responded:

Hi Russell,

Happy to add some background here. You ask, “But aren’t the “anti-competitive policies” basically who has the right to decide how and where listings will be displayed?”

Kinda.

The initial DOJ complaint against NAR revolved around NAR’s initial Virtual Office Website (VOW) policy that allowed brokers to selectively “opt-out” by not allowing certain brokers to display their listings online. This would have allowed a “traditional” broker the right to effectively hand pick the firms that they don’t want to compete with online by eliminating any chance for them to have inventory to show to prospective buyers. From the DOJ’s perspective, the problem was that the under these same MLS rules, that same broker could not prohibit a particular “bricks and mortar” company from showing listings to a buyer who walked in off the street. The distinction being online vs. offline. NAR then amended the VOW rule and replaced it with the new Internet Listing Display (ILD) policy which changed the selective “opt-out” to a blanket “opt-out”. In other words, the broker could not selectively pick which brokers could display their listings online. Either everyone or nobody. Since the ILD policy applies across the board, NAR felt that it eliminated the anti-competitive concerns of the initial VOW policy.At or about the same time, NAR changed its definition of “MLS Participant”. The new rule defines an MLS Participant as a broker who makes offers of compensation to and accepts such offers from other brokers. Prior to the change, an MLS Participant had only to be capable of making and accepting offers of compensation.

This last issue is, I believe, the REAL issue in this case. NAR wants to define who can have access to and display listing information online as brokers who are actively working with buyers and sellers and sharing commissions via the MLS. DOJ believes this is too restrictive and that any licensed broker should be able to have such access. DOJ believes that such restrictions will stifle innovative brokers from assisting consumers in non-traditional ways.

Let’s face it. Most MLSs are powerful entities when it comes to aggregation of Read more

Russ & Russell?

In response to this post, Russ Cofano (of Rain City Guide fame) wrote:

“For a division of the United States government to allege some sort of Realtor price fixing in an industry that is so overloaded (sic) with competition that it almost defies belief IS breading hate and contempt.”

In the present suit against NAR, the DOJ is not alleging price fixing. They are alleging a violation of federal anti-trust laws because of anti-competitive policies that allegedly make it more difficult for non-traditional brokers to “play”, harm consumer choice and stifle innovation. Russ

Thank you for the correction, Russ. There may also be other false impressions for me on this issue. I would be very interested in having someone who is extremely articulate and well informed (like you, for example!) explain why the DOJ may be right to go after the NAR on this point. I’m all for a level playing field for anyone who wants to play. But aren’t the “anti-competitive policies” basically who has the right to decide how and where listings will be displayed?

If you’re game – either send anything you want to post to me or just put it in the comments section and I’ll get an email notice from BloodhoundBlog. It would be a LOT more fun than the agency smackdown.

I would rather have a mind opened by wonder than one closed by belief.

Gerry Spence

Community Choice in Real Estate

“Interested” wrote:

What would be the disadvantage of listing a home with a Realtor who charges a flat fee based on services provided?

Brian Brady responded:

I’d like to take stab at this question:

It’s economics. There is a school of thought that suggests that Realtors are clerks; some are. It has been my experience (as a Lender working with Realtors) that you really do pay for pricing expertise when you hire a Realtor. If you hire a Realtor for a flat fee, it may remove the incentive she may have to negotiate upwards.

I have been a fan of incentive-based compensation that would actually raise the net fee to the Realtor if pricing and timing points were met.
http://activerain.com/blogsview/22686/Pay-For-Performance-A

If you’re selling your home to your cousin, you don’t really need a Realtor; you could hire a real estate attorney to insure that the state disclosures have been met, and contracts are compliant with state laws. Just accept the fact that you really didn’t try to get the “best price”.

There really is only one way to get accurate pricing and that is from a Realtor who knows the local market.

I liked Brian’s response so much I posted it here – instead of leaving it in the comments section.

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Then “allen greenspan” wrote:

So let me get it right. If I don’t believe realtors are worth 30k + to sell my home, and if I sell my home myself (like I have several times) then I am making the world a bad place? Do I follow your logic? Saving myself 30k dollars = breeding hate and contempt.In that long list of tasks you do for your clients can be done by anyone with an ink jet printer and a telephone number of an escrow agent. But we don’t want the public to know that! Why does the Justice Department say that NAR is the last Cartel? their words not mine, is the justice department breeding hate or breaking up a cartel?

Yes. The Justice Department (along with the FTC) IS breeding hate. That is exactly what they are doing. I really don’t give a crap who you list your home with Read more

Our Home Has Only Been Shown One Time In Five Weeks

Heather wrote in an email to BloodhoundBlog:

We listed our house right before Christmas. It has only been shown one time in 5 weeks. Can this be attributed to the holidays, our realtor, price? We have listed in the area listings papers and homes and land and we have signs but that has been the extent of advertising. An open house is scheduled for in 2 weeks. What would
you suggest we do? Thanks

When we look at the subject of marketing it is important to know WHO we are marketing to. Marketing isn’t done to “the public” but to “A public”. The two primary “publics” a home seller needs to reach are other Realtors and home buyers. The communication lines used to reach those two are not necessarily the same. For example, “Homes and Land” can be a good way to reach possible home buyers but would not be a reliable method to reach other agents.
Open houses have almost NOTHING to do with actually getting a home sold. I know there are people who will want to disagree with that statement – but they have not fully examined the facts. All real buyers either are or are not working with an agent. If the buyer has an agent the open house would have nothing to do with them seeing the house, even if they happened to stop by while the house was being “held open”. The buyer with an agent will usually wind up seeing the house when it is convenient for them (which is seldom Sunday afternoon). If the buyer did not have an agent the only thing it is necessary to do to get them to call is NOT put a “take one box” on the sign. The original purpose of a “take one box” was to improve the quality of sign calls. Skip the box with a flyer and if they see the house, don’t have an agent and like it – they will call.

Open houses, ads in picture magazines, web sites, Realtor.com, etc. are ALL attempts to get a buyer (who does not have an agent) to originate a Read more

LEREAH PUSHES IT EVEN FURTHER

NAR Chief Economist, David Lereah totally ignores his detractors by continuing to make predictions about the real estate market. Now he is officially in the dictionary (dictionary.com), listed under the word, “persuasive”.

Lereah persuasive

United States citizens not wanting to purchase a home have been powerless to resist Mr. Lereah’s announcements that “they should” purchase a home now.

Using a form of Mind Control known only to the initiated few, Lereah has run roughshod over anyone trying to not buy a home.

Now, even his detractors, previously intent on renting, are starting to “call a Realtor” – as Mr. Lereah has “suggested” they do. 2007 will be very interesting to watch, as this battle continues to unfold.

What is at stake in this fight is the freedom for individuals to think what they want to think. It seems the National Association of Realtors will stop at nothing short of World Domination and uses Lereah to force everyone to “see it their way”.

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HAPPY NEW YEAR!!

Consumer Federation of America – Controlled by Big Banks?

A somewhat remarkable report has been released by the Consumer Federation of America. I first read about it on Inman News and wondered who they were. Was this just another front group (obviously bought and paid for by big banking) like the American Homeowners Grass Roots Alliance? I also first ran across that group on Inman – Inman will almost always find any letter written by Bruce Hahn, the President of the American Homeowners Grass Roots Alliance, worth publishing. As Hahn is so obviously getting funding from some organization with pretty deep pockets, it was easy to spot him and his organization as a front for someone with an agenda they would prefer be kept hidden. I don’t actually know it is Bank of America but, for sure, it is big banking that keeps Mr. Hahn’s “alliance” afloat.

So I am expecting to find something similar when I read about the report issued a couple of weeks ago by the Consumer Federation of America. Surprise, surprise – they really are a “federation” and they really do have lots of links that have nothing to do with real estate sales being regulated by the federal government. For anyone who would like to wade through the entire report from the CFA here is a PDF of it.

For anyone who would care to read excellent expert analysis of the report and the overall “flow” that is coming from the CFA – there are two articles by Blanche Evans that I think are well worth spending the time they will take to read. I read her most recent one first, it was first published December 12. Then the one she wrote on July 25 of this year.

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I would also like to extend a warm welcome to our newest member, Brian Brady. I was surprised (and pleased) to see you on BloodhoundBlog, as I had just found you (on your blog) a couple of weeks ago and really liked what I saw. Also, I just have to commend our “Top Blogger” on BloodhoundBlog (she is the first one on the list). I vote that if any new Read more