Apr. 20, 2007 - What they Think About REALTORSŪ

The following exchange took place on message board that I have become involved with.  This a very valuable resource for me as it gives me an uncensored look at what the general home buying and selling population is saying.  It also gives me the opportunity to defend what needs defending and expose what needs exposing, not to mention giving me tons of great blogging material.  It doesn't hurt me in my quest to become the #1 name in real estate either.  It also saves me from having to type things twice while I am busy debunking the myths that the general public has about the evil cabal of REALTORS®.  I think you are going to see my blog taking on this direction on a pretty regular basis.

The name and location of the poster has been removed to keep things as generic as possible.

quote:

"I don't believe that any R.E. agent ever protects the buyer. That would be because their money depends on the sale and making sure that the seller gives them that check".

And my reply:

"Oh nooooooo. Although I agree that there are many, many incompetent agents out there, the majority of us realize that the clients interest comes way before monetary compensation. It sounds to me as if you may have been dealing with a timid, maybe newer agent who got overwhelmed by a shark. You should go to the Real Estate Licensing authorities and report that agent. In fact you should report BOTH agents that were involved in your transaction. They both should be held liable. You should probably call them out by name as well. Incompetence should be exposed".

As always, if you have found yourself receiving my blog postings via e-mail, it is because I have either blogged about you personally, blogged about something I know is of interest to you, or I consider you to be a person of deep thinking and intellect and I would love to have you occasionally commenting on my blog. If you would like to be removed from the list simply send me an e-mail saying so.

Feb. 15, 2007 - The Post Card

As I stated at the end of yesterdays post, I have recently received a "Just Sold" post card from one of the local real estate agents.  The main thing that caught my eye was the statement he made that if you gave him your home to list he would "sell it in 69 days or I'll sell it for FREE...GUARANTEED!*.".  Then in very tiny and blurred print at the bottom of the card it says "*some restriction apply".  I promised you yesterday that I would do a post about what I thought those "restrictions" might be. 

In all fairness I went to his web site to try and see if I could find those "restrictions" listed there.  Unfortunately the offer is not extend on the site, so I could not get a clue.  I guess I will just have to tap into my own expertise to see what it would take for me to extend a "guarantee" like this.

First and foremost, I would have to warn you that if I was going to sell it in 69 days or less we would have to definitely price it below market value.  The average market time in this area is 82.6 days.  That tells me that your average priced listing would take about that much time to sell so to get the job done we would really want to go low.

Then we would have to discuss the condition of your house.  All of those minor little defects that you have lived with so easily over the years are going to have to be repaired.  If you want to beat the average, your house is going to have to be above average.  There is a current inventory of 222 houses available in the area right now and with an average market time of 82.6 days, smart buyers, with savvy buyers agents are not in any great hurry to settle for just anything.  We will need to put this under priced listing in move in condition.

Next I would have to tell you that "free" is really not free at all.  If it took more than 69 days to sell, you would still have to pay the cooperative compensation listed in the MLS to the buyers agent.  They have nothing to do with this "guarantee" and they are going to want to be paid.

Do you see why this gimmick caught my eye?  Failed "by owners" and other bargain hunters may well call him because of this post card, only to learn that "free" really isn't a great bargain after all.  This will only justify the reasons they have for trying to go it alone any way.  In my not so humble opinion a better, more truthful and still pretty effective hook would be, "I'll sell it in 90 days or I'll give you 50% OFF THE COMMISSION...GUARANTEED! A fair market price restriction applies." 

Is your REALTOR® putting it all up front and on the table?  I am. 

As always, if you have found yourself receiving my blog postings via e-mail, it is because I have either blogged about you personally, blogged about something I know is of interest to you, or I consider you to be a person of deep thinking and intellect and I would love to have you occasionally commenting on my blog. If you would like to be removed from the list simply send me an e-mail saying so.

Jun. 8, 2006 - It Starts With A CMA

OK, so you have been getting all of those post cards from all of the famous agents in the area. Look at those just listed prices. Man oh man, my house is worth a small fortune. Is it really?

It might be, but then again.................

The CMA, meaning either competitive or comparative market analysis, is trickier than comparing pictures on post cards. Actually, it's an art form. Pictures and prices on a little piece of card board are pretty meaningless when it comes to pricing your house. I am surprised now a days when even the agents picture remotely resembles the agent. I know of an agent who sends out cards with a picture of herself holding a cute little dog that has been dead for three years. Those nice priced just listed cards you find in your mailbox (usually addressed to resident of, or occupant of. What a nice personal touch, huh?) are designed to make the agents phone ring, not to help you price YOUR house.

It would be nice if the just sold post cards you get had sold for prices on them. That would at least be a truer measure of your houses worth, if of course your house was very similarly appointed. Now you can get the sold prices of houses in the area in most local newspapers. There is usually a property transfer section in the real estate section once a week or once a month, but you better drive by that $600,000 home a few blocks over and make sure it's a three bedroom slab ranch just like yours. Some one might have torn that $275,000 slab ranch down in order to build one of those mini castles we've been seeing lately.

Any way, a good real estate agent (like myself) can do pretty tight search of what has been happening in the area over the last few months, in order to give you the best guidance and advice possible. That is where we begin earning our commission

As always, if you have found yourself receiving my blog postings via e-mail, it is because I have either blogged about you personally, blogged about something I know is of interest to you, or I consider you to be a person of deep thinking and intellect and I would love to have you occasionally commenting on my blog. If you would like to be removed from the list simply send me an e-mail saying so.

Jun. 5, 2006 - "Commission" Makes You Click Your Mouse

Checking my blog stats, I see that "Commission" has once again regained the top spot as the most popular category. Reviewing what I have posted in that regard, I wonder what it is that I have left out. I have given you a text book definition of what commission is. I have told you about flat fee listers and given you a good example of what I was up against when I got into a deal with one. What is it about "Commission" that gets you to click your mouse?

Perhaps I should approach the subject like this:

A lot of folks believe that a Real Estate Agent gets you to sign a listing agreement, they put a sign in your yard (if local ordinance or home owner association rules allow), enter you into the MLS, cross their fingers and hope for the best. It could well be that is because they, or someone they know, have run into a Real Estate Agent who has done just that. They wound up paying a full service commission to what was essentially a full service impostor doing a flat fee listers job.

If you keep coming back, I will start a blow by blow accounting of what it means to earn a commission. I am keeping busy earning mine, so I must cut this short for now. See you real soon.

As always, if you have found yourself receiving my blog postings via e-mail, it is because I have either blogged about you personally, blogged about something I know is of interest to you, or I consider you to be a person of deep thinking and intellect and I would love to have you occasionally commenting on my blog. If you would like to be removed from the list simply send me an e-mail saying so.

May. 24, 2006 - Are You Really Going To Charge Me For That?

Hi kids. It's been awhile huh? Sorry. I've been busy.

Remember when I talked about how there are people out there who try to sell us real estate agents all kinds of stuff and how if we foolishly buy everything that comes down the pike we have to try and make it up in our commission structure? Well here's another one. Good old friendly Dr. Bill. Yes indeed folks, Dr. Bill wants to sell me and my fellow agents a list of agents names and numbers.

Just think about it. I could throw out all these useless business cards I've collected over the years. I would no long need the free directory the Association gives me once a year. I could abandon the national real estate forums I participate in. I wouldn't need any of this free stuff any more because I can buy the names and numbers from Dr. Bill and pass the cost on to my my clients via higher commissions. Isn't that a splendid idea?

Won't you please leave us alone Bill Bailey?

As always, if you have found yourself receiving my blog postings via e-mail, it is because I have either blogged about you personally, blogged about something I know is of interest to you, or I consider you to be a person of deep thinking and intellect and I would love to have you occasionally commenting on my blog. If you would like to be removed from the list simply send me an e-mail saying so.

May. 5, 2006 - The Story Of Gene And The Flat Fee Lister

Those who have been following my blog know that commission was my second most popular category. That is no longer true. Rants and raves have taken over the number two spot, while commission has fallen into third place. I have promised to tie the commission posts up with a good story, which I intended to do before I had to congratulate the folks in my last post, and here that story is.

Darrell Rosko, a good client of mine, was moving up in the world. We found Darrell a nice little townhouse when he wanted to stop renting and start owning. A wise move on Darrell's part.

After a couple of years of equity building and appreciation, the walls of this entry level townhouse began closing in on him and Darrell decided he wanted a more spacious detached single family home with a yard and a garage, so he gave me a call. Another wise move on Darrell's part.

We put Darrell's townhouse on the market and got a really nice price relatively quick. Appreciation and a good full service REALTORŪ are a magical combination. In the mean time we went out looking at potential homes. One of the places we looked at was listed by a flat fee lister.

You might recall from a previous post that a flat fee lister is a Broker that will put you in the MLS for a fixed price. That fixed price is lower than what you would pay a full service agent like myself, and you get what you pay for. If you list with a flat fee lister, you have to take the calls and set up the showing appointments and you have to call the showing agents for feedback. The only advantage you have over regular FSBO's (For Sale By Owner's) is that you are in the MLS.

As luck would have it, Darrell kind of liked the place, maybe not enough to make an on the spot offer, but he liked it. When the seller called me for feedback, as he had to do because he didn't have a full service agent, I was guarded with my comments, as is always the case. I never want to show too much enthusiasm for a property and hurt my clients negotiating position. Unfortunately for the sellers, and fortunately for Darrell, Mr. Seller, who is not in the business of buying and selling property on a daily basis, was not so guarded. He told me all about his motivation for selling. He was on a dead line and time was bearing down him like a run-a-way locomotive. His back was to the wall. He told me things a seasoned real estate professional would never say to a buyers agent.

Needless to say, I called Darrell and told him of the sellers multiple reasons for needing to sell and advised him that we could probably save a bundle if we made an offer on this place. We came in low, negotiated a nice under market value price on the place, and even worked out some additional concessions on the home inspection. All this because the seller wanted to SAVE money on commission using a flat fee lister. The seller could have paid a commission for full service representation and still put about $20,000 more in his pocket.

The sellers continued to call me with questions throughout the transaction. On each occasion I advised them that I was not their agent and they should be talking to the person who they listed with. Each time they told me that that was not a part of their limited service deal.

It's a good thing Darrell was properly represented, as are all of my clients, he got a really good deal.

As always, if you have found yourself receiving my blog postings via e-mail, it is because I have either blogged about you personally, blogged about something I know is of interest to you, or I consider you to be a person of deep thinking and intellect and I would love to have you occasionally commenting on my blog. If you would like to be removed from the list simply send me an e-mail saying so.

Apr. 20, 2006 - More Commission Stuff

In keeping with the train of thought that "Commission" is my second most popular category, here is more commission stuff. Today I will give you some Illinois law concerning commissions.

In Illinois only a licensed broker may collect a commission. In order to do that, a licensed broker must be hired by having a listing agreement in which the seller agrees to pay a specified commission. The percentage or dollar amount of commission must be clearly expressed in the listing agreement.

A commission is usually considered to be earned when the work for which the broker was hired has been accomplished. In Illinois, this means that the listing broker generally is entitled to a commission after procuring a full-price offer with no contingencies from a buyer who is ready, willing and able to buy on the seller's terms as set forth in the listing. Courts may prevent the broker from receiving a commission if the broker knew the buyer was unable to perform. When terms other than those offered by the original listing are agreed to as indicated by a contract of sale signed by both buyer and seller, the broker is entitled to a commission.

Now dear readers, if I continue to post this kind of stuff will you still visit my blog?

I am willing to bet the readers who have made commission my #2 category did not have text book lessons in mind. Do not fret though, my friends. Just keep following along and I guarantee you will be rewarded with a great rant when I tie it all together. 

As always, if you have found yourself receiving my blog postings via e-mail, it is because I have either blogged about you personally, blogged about something I know is of interest to you, or I consider you to be a person of deep thinking and intellect and I would love to have you occasionally commenting on my blog. If you would like to be removed from the list simply send me an e-mail saying so.

Apr. 18, 2006 - My Second Most Popular Category

The second most popular category in my blog is commission. I have only written about commission once. That was a post entitled "The Enemy Inside Your Television Set" and that was more or less a rant about how paying for leads from the mostly useless lead generating companies out there, who prey upon unsuspecting buyers, sellers and agents, are helping to drive up the cost of doing business. Now that I know that "Commission" is such a popular destination inside my blog I will give you some text book type content to dwell upon.

Commission is the compensation that a seller pays a broker for securing a buyer for their property. The amount of that compensation must be specified in the contract (listing agreement). The compensation can be in the form of a brokerage fee computed as a percentage of the total sales price, a flat fee, or an hourly rate.

I will give you my opinion, based on experiences I have had, of flat fee listers in another post, which will probably turn into another rant. And let me tell you this, if I worked at an hourly rate and it took more that fourteen days days to sell your property, I would make way more money. There will be a future posting on that as well.

Commission is ALWAYS NEGOTIABLE. Anyone who tries to impose uniform commission rates is in violation of state and federal antitrust laws. A broker can, however, set the minimum acceptable rate for his or her own firm, which is why I work for Charles Rutenberg Realty of Illinois. There is no "minimum acceptable rate". My fee is negotiable. 

Don't misunderstand me, I am not a cut rate lister. I am a full service REALTORŪ who expects to be paid fairly for the full service I provide. But just what "fairly" is, is negotiable.

As always, if you get my blog postings via e-mail and that bothers you simple send me an e-mail telling me to remove you from the list.

Jan. 4, 2006 - The Enemy Inside Your Television Set

So I am watching the news this morning and there it is, the "What is your home worth?" HouseValues.com commercial. What in the world is HouseValues.com? Allow me to tell you. They are yet another company who is out there working to drive up the commission you pay when you hire a REALTORŪ to sell your property. How is that you ask? Well my friends, House Values is going to sell your information to the unlucky agents who PAY them for the privilage of doing a market analysis for you. Now I'm not sure, you may or may not be selling your home, you might just want to know (as well you should) how much worth your house adds to your bottom line. These poor agents who are out there BUYING your information, in the hopes that you will be listing with them, are therefore going to have to increase their commissions in order to make up the loss.

My question to you is this: Why in the world would anyone want to give their information to a company that is not going to do your market analysis, but is for sure going to sell it to someone else, when they could simply go to my website and request one free of charge, no strings attached, knowing that I am the only one getting your information?