Month: October 2006 (page 2 of 7)

by Greg Swann

Suburban Phoenix Real Estate Broker

Author website

Even though I have yet to persuade a home buyer to whipsaw sellers using my strategy, I thought I would pass along a tip for buyers on getting a better deal from your buyer’s agent — no matter where you might happen to be.

I happens that I have a friend who is moving soon, but not to Phoenix, alas. He took my advice and asked the question — “How much do you charge?” — of a potential buyer’s agent. The answer he got in return was rich in tap-dancing but not in results, so I wrote a model follow-up, shown below, for pressing the point.

Before we get to that, we need to consider some issues.

First, a rebate from your buyer’s agent may not be lawful in your state. I consider this absurd and obscene, but your state’s Association of Realtors may be keeping your state legislature as a special pet.

Second, if homes sell for lousy money where you’re buying, don’t get cheeky. A 3% commission on a $60,000 house is eighteen-hundred bucks. I consider that starvation wages, a clarion call to local Realtors to “find your passion” elsewhere.

But, third, a premium price is only justified for a premium product. If you’re buying investment real estate, you should pay Jeff Brown whatever he wants. But ordinary buyer’s agents are not a scarce commodity — too much the contrary. If a prospective agent huffs and puffs that he’s worth more because he charges more — press on. If an agent really is too busy to work with you, she might actually be worth more money — but she might not be able to deliver the value anyway.

But: Right now, the world is crawling with underemployed Realtors. If one won’t make a deal, the next one will — if you are willing to negotiate to hang onto your own money.

Here’s the language that I wrote, which you can easily adapt to your own circumstances:

Dear Realtor:

I do anticipate working with a buyer’s agent when I make my move. However, I believe I am justified in regarding myself as “a bird in the hand” for several Read more

by Greg Swann

Suburban Phoenix Real Estate Broker

Author website

The Future of Real Estate Marketing rolled its own Google-based real estate search tool, as did BlueRoof.com. I think these are really sweet ideas about which I intend to do nothing, but I would gleefully hit a tip jar if someone were to set up a canonical real estate search on its own domain or on a third.level.domain on an existing site. Make it integrable and I’ll integrate it with credit into my sidebar. All the big-boy tools (Technorati, blogsearch) kinda suck, so a mission-critical real estate info search tool is a solid win.

I cited the Maverick entry at Mike’s Corner the other day, but I want to link back to it again. I think this is Serious Business, and it hasn’t gotten the hashing out it deserves. Daniel Rothamel from The Real Estate Zebra has a particularly insightful comment.

More from Three Oceans Real Estate — Electronic signatures: what are you waiting for? I’m on the lo-tech end of this, for now. I’m told it’s potentially legal in Arizona, but I haven’t dug through the nitty-gritty details.

Bonnie Erickson drew my attention to a post she put up on Active Rain in September: In changing from sub-agency to to buyer’s agency did with throw out the baby and keep the bath-water?

At 360Digest, Marlow Harris has a very thorough run-down on the relo racket.

RSS pieces (blogrolled) offers the “Top 5 secrets of successful blogs. I happened to hear from Jennifer Dizmang, who taught a class I took just lately on using self-directed retirement account to invest in real estate. That rocks, yes? Jennifer knows a whale of a lot of other stuff, too, all worth millions. Guess what she doesn’t know? Yup. She’s a blog-o-novice. She wants to take flight, but here wings aren’t ready. I sent her the RSS pieces piece, but if y’all have other ideas for her, you might send them along.

Hotpads.com wants you to know that it is courting controversy with electoral heat maps.

The XBroker (blogrolled) craves attention — but he earns it. This is a tearing back of the veils, and it’s kind of roughshod, even rapine, but Read more

by Greg Swann

Suburban Phoenix Real Estate Broker

Author website

I’m juggling stuff, so I’m going to try to sneak in some little things fast. There’s a lot of great stuff out there…

Pat Kitano at TransparentRE has a nice scary story for Halloween: The disintermediation of the bond traders.

Alive with numbers, Kevin Boer at Three Oceans Real Estate takes two spins of the Altos Research wheel and also calculates the financial clout of Zillow.com’s demographic.

Bonnie Erickson at Real Estate Snippets has nice advice on IRS Section 1031 tax-deferred exchanges and some sage tips for new real estate agents. Bonnie is in Minnesota, where new agents are more officiously advised to fall on their swords.

More later. Gotta race…

Technorati Tags: blogging, disintermediation, real estate marketing

by Greg Swann

Suburban Phoenix Real Estate Broker

Author website

Broker Bryant’s comment below put me in mind of a business model I invented earlier this year.

I spent my second two years in real estate in a brokerage such as Bryant describes: You pay a monthly fee to hang your license. If you produce — not encouraged — you pay a transaction fee plus an Errors and Omissions insurance premium. There were 185 agents in the brokerage, of which maybe 15 of us were doing more than one transaction a year. I was doing a lot more. I was there because it was the cheapest 100% plan available to me, because I knew they would leave me alone — which they did — and because I was biding my time until I could take the test for my broker’s license.

But it occurred to me that the NAR has got got be about one-third dead weight by now: Agents with style, charm and zeal — just no clients. Even so, an active real estate license is a valuable thing to have, even if you really are doing one or fewer deals a year.

On the other hand, you are only valuable to me as a broker if you are not increasing my liability. When you do nothing except pay me, I love you. When you write contracts or engage in other random acts of agency, you scare me.

Here’s the idea I had: You can hang your license with us for FREE. No monthly fees — forever. You arrange your own renewal hours and pay the state’s fees, but you own me nothing, and you can hang your license with me for free forever.

What’s the catch? You cannot ever write a contract or represent a client. You cannot do anything for which I can be sued. If you have a mother-in-law deal, that’s great. It will be handled by a working agent and you’ll get a 50% referral fee, with no nickel-and-dime brokerage fees deducted. Refer as many deals as you can — your referral fee is always 50%. You can’t do anything, but you can make a ton of money for doing nothing.

We Read more

by Greg Swann

Suburban Phoenix Real Estate Broker

Author website

I love it! Inman Blog cites an amazing open letter from the Minnesota Association of Realtors to its membership.

The gist: Real estate brokers are retards but it’s not their fault!

Wait, that’s not right. What it says is, if you’re not making money as a Realtor, you should probably quit now, because your broker won’t sever you, even though, by not severing you, he is hurting his business and the real estate industry as a whole.

What it really says is this: The real estate brokerage safe harbor exclusion to the federal income tax withholding laws makes real estate brokers behave like retards, only this time they can’t seem to grow another foot to shoot themselves in.

Too frolicking bad for them, huh?

Here’s an interesting question: How do you charge a premium price for a commodity that is not in short supply? The DeBeers diamond cartel has an answer. The National Association of Realtors does not…

Technorati Tags: blogging, compensation for buyer representation, disintermediation, real estate marketing

by Greg Swann

Suburban Phoenix Real Estate Broker

Author website

We’re in the business of offering a flat-fee for buyer’s representation, we have been for a while. Cathy and I have both written contracts with the flat-fee language. But where policy can be fast, promotion takes time, and it is not until midnight tonight that we will begin to promote the flat-fee idea.

Even then we’re kind of a slow roll out, because we want to make sure that, even if we end up with a tiger by the tail, we manage to stop that tiger, as it were.

I know there are people following this all over the country, so if you want to see all the flat-fee features we have built so far, click away.

As with everything Bloodhound, there is a philosophy. Either we hate the way everything else is done or we simply love to do things differently, but, either way, nothing is done the way anyone else does it.

For the print ads, we are deliberately violating the visual style of these kinds of things — in two different violations. I don’t see any way for a reader to regard us as being something different if we look just the same. The same goes for the content of the ads — and each is also radically different from the other. We don’t have an unlimited amount of money, so we’re starting with something akin to a binary tree search to see what works.

There are two Realtor.com ads that will work together. These may not seem to be as radical, but we put a lot of thought into getting the reader’s response, if we can but once get the reader’s attention.

Finally there is one web-based landing page, so far. I have a killer alternate within me somewhere, but it is killing me to get it out. The idea of the landing page is to get people who have voluntarily come in from the ads to take the next step, filling out a home search form and setting an appointment. The appointment will be the actual close, but our plan — for now, at least — is to have no hands-on involvement Read more

by Greg Swann

Suburban Phoenix Real Estate Broker

Author website

UrbanDigs.com offers some great practical advice on timing low-ball offers. TrueGotham offers further thoughts. Both of these posts are Manhattansized, so you’ll need to scale accordingly for your local market.

Bonnie Erickson at Real Estate Snippets has excellent advice on the subject of your Realtor’s excellent advice. We’re not being pushy, honest! We’re helping you quarry your home’s inner greatness.

From Jeff Brown at Behind the Curtain: What do you want from the news, truth or accuracy?

PressReal.com (blogrolled — sorry, should have done this a while ago) asks Who pays the commission?, a question near and dear to Bloodhound hearts.

On the subject of “discounting” generally, Greg Tracy at BlueRoof.com composes a symphony:

But the best part about our new company is all the support we get from our clients. The consumers like what we’re doing because we are a new business model and most consumers really don’t like the traditional real estate models.

It’s funny if you think about the whole criticism of “discount broker”. Some people from my previous brokerage say that I’m selling out because now I’m a “Discount Broker”. Well, what does that mean?

That means that I’m doing the same thing for less…

And that’s the criticism? Even funnier is when the large companies take out ads that put down “discount brokers”. It’s like Albertson’s taking out an ad that says don’t buy from Safeway because they sell things for less. That’s what these agents are saying. And it’s really funny because most of them discount their commissions too, they just don’t admit it. We don’t discount our service or cut corners, in fact we have higher minimum standards for marketing our listings than most of the industry.

When I meet with people and show them our model and how we can help them they get excited about our model. We’ve had people tell us they were going to name rooms in the home after us and they send us incredible testimonials and they refer all their friends to us, which is the greatest endorsement they can give.

(Gentlemen: If you have a lingering problem from the photo in Greg Tracy’s post, The Phoenix Real Read more