Month: November 2006 (page 6 of 8)

by Greg Swann

Suburban Phoenix Real Estate Broker

Author website

Let’s print up a junk mail envelope: Doug Quance may already have won!

Witness:

I think I might have found a winner…

I searched our MLS yesterday, and found a co-broke of 20%! New construction 4 bed 2.5 bath listed at $270K.

http://brokersfirstrealty.com/2006/11/12/commissions-incentives-and-ethics/

It’s no typo… the listing agent spelled it out in the public remarks…

Dave Barnes dropped a dime on this one, not as high in percentage terms but a huge amount of money.

Can you beat these? I know of a bunch of 10% deals, but nothing this extreme. How about you?

(Inlookers take note: We come not to praise excessive commissions but to damn them.)

Technorati Tags: arizona, arizona real estate, compensation for buyer representation, phoenix, phoenix real estate, real estate marketing

by Greg Swann

Suburban Phoenix Real Estate Broker

Author website

I read some copy for a real estate listing, and I thought, “Wow, this is game and lame at the same time.” Game because the Realtor was really trying to stretch beyond typically insipid real estate copy. Lame because, well, even so — the copy was lame. It led with a cliche, then jumped immediately into EduSpeak, the unreadable argot of academia. Within a scant few seconds, we were right back in Realtorville, an unending list of features without a benefit — nor a beneficiary — in sight. In the end, it was game-by-intent, an attempt to attempt to do something different — without actually doing anything differently.

Here’s my take on the same theme:

What you notice first is the quiet — but you don’t even actually notice it. The air is so still and the silence so complete that you don’t truly hear the quiet until it is interrupted.

What was that?! That scampering sound. You peer into the underbrush and there it is — a Whiptail lizard twenty yards away — and you were actually able to hear its tiny footfalls.

You don’t feel the breeze as much as you see it in the lazy skirling of the Redtail hawks overhead. The sun is omnipresent, but you feel it best in the tingling on your skin. You breathe deep, relishing the crisp, clean scent of creosote slowly baking in the heat of the afternoon…

This is the desert — the desert you came here to find but lost somewhere in a vast, overpacked parking lot.

This is the desert — untamed and illimitable, alive and thriving against all odds.

This is the desert — not a day trip, not a camping trip, not a now-and-then excursion.

This is home. Your home, from now on…

That’s an introduction. I’m not selling a house. I’m selling a life. In this case, a life with some negatives — the commute to Phoenix is at least 45 minutes, and the buyer is going to find snakes and scorpions in the home several times a year. But what I want to sell about this property is the unique life that this home Read more

by Greg Swann

Suburban Phoenix Real Estate Broker

Author website

This is my column from today’s Arizona Republic (permanent link). I don’t write the headlines, and I don’t think this one is terribly representative of the article, but it is what it is. I asked the paper to change the attribution to use BloodhoundBlog’s web address rather than my phone number, so maybe the poisonous phone calls will turn into poison-pen letters instead.

 
Killer deals often come with payoff

I have clients who are closing escrow on a new-built home soon. They’re moving from a house of about 1,725 square feet to a home of about 2,100 square feet.

Because it’s a new build and because of when they’re buying it and, most especially, because it’s a spec home — a home specified by and started for another buyer who has since canceled the purchase — they’re getting a smoking deal.

The builder is trying to close on absolutely every spec home, so it’s making great deals. It’s giving my buyers a $75,000 upgrade package, plus throwing 6 percent of the purchase price toward their down payment.

If the Valley’s real estate market gets back to normal soon, they’ll have a ton of equity fairly quickly. And even if not, this home is an incredible bargain — an unrepeatable opportunity.

Here’s the kicker: The builder’s sales rep told me in private that the buyer’s agent’s commission is 8 percent. Unbelievable!

I strive to be a vigorous champion for my buyers, but builders leave precious little room for a Realtor to effect any meaningful buyer’s representation.

In effect, taking a party to a new-home subdivision is a referral. That could explain why so many builders and Realtors treat it that way.

For my part, I’m doing everything I can to defend and protect my clients’ interests, and that still won’t be very much.

So how much should I get paid for doing not very much work as capably and professionally as I can?

Surely not 8 percent. I won’t even take 3 percent on new construction.

Here’s what I did for this home: I conceded 6 percent to my clients, keeping 2 percent for the brokerage.

They didn’t have to ask for this, nor should Read more

by Russell Shaw

Mega-Producing Realtor

Author website

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

by Greg Swann

Suburban Phoenix Real Estate Broker

Author website

I have another column in the newspaper tomorrow beating up on buyer’s agent’s commissions, so this seems an appropriate moment to make a confession:

I don’t think it makes a damn bit of difference.

This is the fifth column in this series, running every other week because the editor hated all the complaint calls from Realtors and brokers. I get quite a few calls, too, almost always line-blocked and anonymous. What’s interesting is that I have never had a call from an ordinary reader on this topic — not even when I’ve talked about huge commissions at new home subdivisions.

We’ve been advertising the idea of rebates on buyer’s agent’s commissions in various ways for weeks now. I can measure every inbound click generated by these ads. Net consequence: Crickets chirping. Realtor.com hasn’t been totally underwhelming, but one of the two magazine ads has drawn not one single click-through. The second best performer is the button on our web site. The uncontested champion: The button on BloodhoundBlog. Even so, total interest, scattered and mild, has not resulted in one closed client. We’ve closed on buyers, but not on anyone who showed up to find out more about rebated commissions.

People can be excited by the idea once it is explained to them, but it has to be explained in detail, and even then some don’t get it. Either the idea that buyer representation is “free” is nearly ineradicable or people really don’t mind financing all those extra thousands of dollars.

Jeff Brown foresaw all of this, but I’m from Missouri. Even now it is astounding to me that people would not be more rational about huge sums of money.

Sellers pay attention, and the promotion we do to sellers makes tracks. Talking to buyers in a way that would make sense to a seller has done nothing for us. I don’t claim that this idea cannot work, nor that the way we implemented it was without fault. I’d be interested to hear from anyone playing with similar ideas. My take, for now, is that offering a hard-headed — as against soft-hearted — benefit to buyers is a Read more

by Greg Swann

Suburban Phoenix Real Estate Broker

Author website

ASU’s Dr. Jay Butler’s housing numbers for October 2006 have been released:

The Valley’s single-family home-resale market clicked higher in October though sales are well off from last year’s frenzy.

There were 4,985 sales in October, up slightly from 4,875 the previous month but down nearly 41 percent from October of last year, according to the Arizona Real Estate Center at Arizona State University Polytechnic.

The median price stayed essentially flat. The new median of $257,000 is marginally higher than $256,900 in September.

Here’s the juicy news, though:

The new median is a little more than 1 percent lower than in October of last year.

Butler has median values down 3.78% from the peak in Jun 2006.

Almost this sounds like a houseful of bad new stuffed into a baby bootie, but it is actually a nice illustration of the uselessness of Butler’s methods. He strikes a median among all sales, Valleywide. If houses are selling well at the high end of the price spectrum and poorly at the low end, this will tend to make the market as a whole look healthier than it is.

John L. Wake at Arizona Real Estate Notebook has a better set of median values, charting October’s numbers city-by-city.

We work from a completely different set of numbers in our Market Basket of Homes, and I realize the curse of these analyses is that they’re all based on different assumptions. But we’re interested in the houses we actually sell and that the people in the middle of the Bell Curve actually buy. Moreover, by working with a representative subset of that market, we can read every listing, one-by-one, to try to determine what really happened.

How did those houses do in October? Down 4.07% from September, down 7.97% year-over-year, and down 9.88% from the December 2005 high. This is not the disaster it might be portrayed in the newspaper. After all, two-year appreciation on an average Market Basket home is 38.21%. Three-year appreciation is 63.15%. But this news is in stark contrast to the news reported by Dr. Butler.

MLS inventories are down, and some people want to argue that this means the market has turned. Read more

by Greg Swann

Suburban Phoenix Real Estate Broker

Author website

Is anyone going? We may go to Sell-a-Bration next year, but the NAR convention has never appealed to me. The invitations have been steadily more amusing, though: “You will not either get malaria!” I’m kinda thinking it will be less than a full house…

Technorati Tags: real estate marketing