If only this business were as easy at it looks on Million Dollar Listing. If you've ever watched the show, all the agents ever seem to have to do is throw open the front doors for an open house, have plenty of fancy snacks handy and wait for the offers to come rolling in. Needless to say, much as L.A. Law had little to do with the actual legal profession, these snippets from Bravo barely relate to the realities of marketing real estate.

Yesterday I promised my daughter I'd only work for an hour or so. That hour easily stretched to three hours. And I still have a website to complete for a peer, a newsletter to write and a dozen other minor tasks to complete. So what has taken so much time? Marketing, my friends. Marketing.

On Saturday I took a listing on 8552 W. Rue de Lamour in Peoria. Since that time I have entered the listing into MLS, ordered a virtual tour, added a listing to craigslist, ordered an e-mail flyer and added the property to my website and posted an entry about the home on Active Rain. That still leaves me to create the individual property page for the home, create a blog post here and send send Just Listed postcards. I left the flyers in the hands of my listing coordinator and am actively working to shift additional responsibilities in the future.

The cycle actually will repeat itself tomorrow when I enter another listing, this one a 3.3-acre horse property in Wittmann, into the MLS tomorrow morning. All of the above will be done once again. And again for the other 10 properties I currently have listed.

My goal is to be working with a Buyers Specialist by the end of this year, allowing me to focus on listings and relocation clients. There are some hurdles to overcome to get there, but once I'm there I'm confident the amount of work passing through at Dalton's Arizona Homes will be much higher than it is now.

In the interim, I did take two intelligent steps. First, I am using a listing coordinator to assist in getting my marketing rolling as soon as possible on these listings. When you offer a 45-day listing period on most homes, there is little time to lose.

And second, I am partnering with another agent in my office, Jaie Wiley, to handle rental and rent-to-own leads. These have been very consistent over the past two years and bringing in help is the best way of making sure all of them are handled expeditiously.

(c) Jonathan Dalton, 2006 / Jonathan Dalton's Arizona Homes

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In writing the article "Why Didn't My House Sell" I neglected to mention another trend becoming more prevalent though it has no proven track record of success, and that is higher-than-average co-brokerage fees paid to the buyers' agent and other inducements to provoke a showing.

In culling the expired listings I ran across everything from a 6% co-broke fee to a drawing for a free week's vacation in a beachfront condo in the Caribbean. And, as previously noted, these listings all had expired.

Some argue that most agents will steer their clients toward the homes with these type of inducements without disclosing the extra payoff they will receive if their buyers purchase. While I can't say this never happens, the implication that a majority of real estate professionals would violate their ethical fiduciary responsibility to their client over a few hundred dollars is repugnant. And it's also untrue.

For all the discussion and hand-wringing among real estate professionals about disintermediation - the elimination of the so-called middle man in transactions (and the real estate agents in terms of real estate) - we as a whole seem slow to recognize that the rise of the Internet and buyers' increased use of the web in searching for real estate is making such buyers' agent bonuses irrelevant. It is not the agents driving the bus, so to speak. It is the consumers.

I send properties to my clients (regardless of the co-brokerage fee being offered, incidentally) and inevitably my clients will have selections of their own that they found either through the property search on Dalton's Arizona Homes or elsewhere. To believe that I am the sole selector of homes and therefore able to guarantee myself these bonuses is ludicrous. (It's equally ludicrous to believe the Internet will eliminate my role in a real estate transaction, which is at the heart of disintermediation theory. Change? Absolutely. Eliminate? Never.)

All these financial inducements cannot compensate for proper pricing and aggressive marketing. The rest is just fluff.

(c) Jonathan Dalton, 2006 / Jonathan Dalton's Arizona Homes

A few days ago, the gentlemen at sellsius reminded us all that there is no spoon. As this was the last post I've seen out of them, they since may have fallen victim to Agent Smith (follow the white rabbit, Neo) but that's neither here not there. Most interesting about this post was the complete lack of context. All we know is Keanu Reeves is being told the key is understanding there is no spoon.

As I looked at the picture, I realized the concept applies to many of the hot topics in the real estate blogosphere today.

Take, for example, the quest for finding the true valuation of a property. Zillow has its zestimates and eppraisal.com has its range of values. Zillow trumpeted the accuracy of its estimates, at least until they were called on some of the more glaring inaccuracies, while the folks at Realty Thoughts are clear from the get-go that their range is only an estimate and not a replacement for the work of an appraiser or real estate agent.

Having said that, even a full-fledged appraisal is nothing more than an opinion (albeit a reasoned opinion) about the value of a property. It is based on recent sales in a given area and adjusted according to the merits (and challenges) of the subject property. Appraisers bend the numbers like Neo and the children bending the spoon, but the truth of the matter is ... say it with me ... there is no spoon. Three appraisers can look at the same property and assign three different values but which is the true value? All of them? None of them? Is an answer possible?

Now let's say we find three appraisers to all agree on a certain value. Does that mean this is the price the seller can expect to receive should they decide to sell? Absolutely not. Market factors, completely different than the factors used for appraisals, enter into this equation - where currently listed homes are prices, at what prices listings have expired, the amount of traffic through a house at a given price. Oh, and also the size of the house.

The size of the house, you ask? Absolutely. As a home's square footage grows, it's market value on a price per square foot basis falls. There are a number of reasons for this but human nature and market mechanics are the dominant two; demand is stronger for the smaller homes than the larger ones, creating a larger pool of buyers and more competitive prices while human nature is such that buyers get antsy if the list price creeps toward magic numbers (such as a half million, etc.)

Is there one set market value for a home? Well, eventually there will be - only after buyer and seller have agreed on a price. But for the agents trying to calculate what that price may be, we fall back to dealing with one person's opinion. Three different agents easily can lead to three different perceived market values.

(Circling back, once an offer has accepted and the buyer and seller set their market value, it's then up to the appraiser to determine if that figure is reasonable enough for a lender to finance the loan. Most often, the appraisal agrees with buyer and seller which then leads to the appraised value being adjusted to meet the market value even though appraisal and market value most likely were two different figures when the transaction started.)

Sound confusing? Convoluted? Just plain insane? You either can follow Jimmy Buffett's recent advice - Breathe In, Breathe Out, Move on - or accept the reality that ... yes ... there is no spoon.

The spoon test also can be applied to compensation for buyers' agents. Some will argue the buyers are paying for their representation because they bring all the money to the table and the compensation is priced into the home. Some will argue that the seller is paying the buyers' agent because the commission paid represents profit that has been surrendered in the name of making a deal. Without delving too deeply into the issue (for that, you can go here or here or even here),  I'm absolutely confident in saying there is no spoon.

There is a physical manifestation - the check the agent ultimately receives - but for the buyers and sellers plugged into the Matrix of Real Estate (not to be confused with the Matrix blog) the commission does not physically exist. Neither will see it. The buyers almost certainly will pay the same price regardless of the commission. The sellers already wrote off the additional money when they signed the listing agreement. We argue over possession of the spoon but there is no spoon.

Next topic: "Do you believe that is air you are breathing?"

(c) Jonathan Dalton, 2006 / Jonathan Dalton's Arizona Homes

As a journalism major you would think I would know the inventor of the "three-dot" column off the top of my head - Jimmy Breslin, perhaps? I'll have to look it up shortly. But I'd rather not let that detail get in the way of a few random thoughts in three-dot bandit style ...

Read yet another article this week encouraging buyers to negotiate the commissions their agents receive before beginning their working relationship. Two interesting sidelights - one, the agent writing this article suggested offering a $1,000 non-refundable retainer to the buyers' agent at the outset.  "Mr. and Mrs. Buyer, ready to buy? Great, make the check out to me and we'll get started." - a great setup for the agent, maybe not so great for the client. Two, the article said if your agent isn't willing to accept the flat rate suggested, move on to the next because there are many, many underemployed agents in the Valley right now. Absolutely correct ... and for the cost of helping a new agent learn from their mistakes on one of the biggest purchases you'll ever make, you too can sponsor a starving agent.

There are two reasons why agents are underemployed in the Phoenix market - they either are brand new and haven't built the business, or they haven't built the business over time and they deserve their underemployed status. Would I have made this argument when I got my license two-plus years ago? Of course not. But that also was $8MM in sales and three-dozen transactions ago.

Want to support an underemployed agent, many of whom double as friends and family? Take them to Oregano's for a slice and a pop ...

Spent most of yesterday preparing the initial mailing to Westbrook Village, with preparing defined as printing and sorting letters and stuffing envelopes. Today will be spent putting together the bulk of the content for the website. One of the group members, Gail McCarroll, had a great idea (later named by John Vescova in my office) of "Life After Westbrook." I think it's going to turn out pretty well ...

Speaking of the website, here's the world debut of the banner:

If all goes well, the website will be up and running by Halloween ...

There are no numbers to support this contention, but I'm seeing signs of the market picking up. Internet leads are on the rise, Tobey's ears are getting perky, and this week I received two offers on a property that had been on the market unloved since June. And another two calls came on the property after it came off the market. It's anecdotal, but I'll take it ...

Off to Ahwatukee tomorrow where I hope to see the Arizona Fury Boys 97 United's first-ever victory ... think good thoughts.

 

(c) Jonathan Dalton, 2006 / Jonathan Dalton's Arizona Homes