Archive for January, 2009
Ask the Bloodhounds: “What are your top recommendations for a Realtor just starting out in today’s market?”
An email from Nicole Ford, a newer agent working on the Gulf coast of Texas:
I’m a new agent (started in July) and have recently started reading the Bloodhound Blog. First, I want to say thank you for providing such an incredible resource. Second, I have a question that I’d like to ask of you and all of the other incredible writers (and readers) on your site: What are your top recommendations for a Realtor just starting out in today’s market? What are the most important things that I can be doing to guarantee my future success?
I realize that I have picked a very difficult time to start as a Realtor, but I’m convinced that once I weather this storm and become successful now, I can look forward to a great career in the future. I also believe that a positive outlook (even in the toughest times) can be a tremendous asset.
Thanks in advance for any thoughts and advice that you share. I look forward to reading (and contributing to!) your blog in the years to come.
All the best,
South Padre Island Realtor
I’m interested in answers to this question from all perspectives. I get the impression that Nicole has things more together than most new agents, but some sincere advice for beginners will be welcomed, I’m sure, by the ninety-and-nine folks who didn’t have the guts Nicole exhibits by asking the question.
So what should a new agent do to keep body and soul together in this market?
My conversation with my client earlier today started off rather pleasant, really.
Our talk was lighthearted – what were the plans for Superbowl Sunday, the latest buzz about work – the winter weather in Chicago and the prospects of warmer weather arriving soon – hopefully. It wasn’t the reason for my call, but the banter was really my attempt to put off the inevitable. I needed to have “the talk.”
“Your child is ugly.”
No segway – no transition – I just came out and said it.
“Your child is ugly.”
Again – silence. I inhaled deeply expecting the click and then the drone of the dial tone, but I could still hear the background noise of the TV on the other end of the line.
“Excuse me?” my client asked?
“Everyone thinks your child is ugly. Especially me.”
How many times have you run into an acquaintance – maybe at the mall – where their little infant or toddler was with them in-tow. You’re introduced to the little one – and perhaps you are taken off guard – a little. Let’s face it – sometimes some people have ugly kids. You wouldn’t say anything out loud or to the parents – usually – you’d smile – but in the back of your mind, you think – “geeshh – that’s one damn ugly kid.”
Okay – I really didn’t tell my client that her child was ugly – but in a round about way, I sorta did.
Last year, at the end of October, I again sorta initiated the talk – it wasn’t as harsh as “your child is ugly” – more like – “your child may not have everything going for him, but at least he has a nice personality”.
I’ve had my client’s listing on the market now for eleven months. We’d renewed once and reduced the price as well. Traffic came to an absolute standstill in October – miraculously, I showed it three times this week – but with no feedback. Just buyers starting their search – they’re testing the market. But time has finally run out – the listing was about to expire.
Rather than continue the masquerade, I finally came out and told my client what I truly thought their condo was really going to sell for in today’s market. The listing renewal was up for discussion. If I was going to continue to represent them in listing the home, I would not take it unless they made a roughly $60,000 price reduction. It may not be what they perceived it’s worth to be, but it is what buyers might be willing to pay. Problem was – they weren’t willing to hear the news last October and I quite frankly wasn’t quite – yet – willing to tell them the truth.
I guess I thought that telling my client that they had to make a $60,000 price reduction on a condo priced in the mid $300,000 range was too difficult. Maybe I too felt hopeful that things would improve.
It wasn’t until today that I thought – enough is enough – the truth is ugly.
How many ugly children are on the market today? Prior to making the call this morning, I was listening to the news regarding the latest housing statistics – the shear number of homes on the market through out the US. I also recently read that in Miami alone, the absorption rate is over 3 years. I really began to wonder what the impact would be if sellers understood just how ugly their kids were?
My clients want to move but they don’t need to move. The bulk of my conversation this morning was to revisit my client’s motivation to sell. Had their situation changed? Were they still okay financially? Was a sale dire?
It was motivated by a “want” to move up, but unfortunately, even in the past – short – three months, values have really fallen to the point that made their “want” to move simply no longer possible. The new target price was below their mortgage value, potentially prompting a short sale. Their equity is gone and hence the ability to move up was an impossibility – even exploring FHA financing on a potentially new home. Had their situation changed from want to need, their decision would have been very different, however, the call ended – pleasantly. I was left with one fewer listing.
In terms of running our real estate business like any other business, I believe we wouldn’t want to carry inventory, unless it was priced to sell. I don’t want to stock the shelves with “stuff” if no one is buying – or at least not buying at the wrong price.
I think we need to do a better job at cleaning out the shelves.
I often wonder what portion of this crisis is attributed to the ugly children? I am not referring to the short sales and foreclosures. As real estate professionals, are we acting responsibly by having the tough conversations with sellers to really align price with market conditions. If not, how many of us walk away?15 comments
Tom here…. Sorry for the delay, but better late than never….. (my comments are in bold)
The Federal Open Market Committee decided today to keep its target range for the federal funds rate at 0 to 1/4 percent. Nothing new there and no surprises. Can’t go lower than zero and certainly can’t raise them right now. The Committee continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time. Here again, no big surprises. I think the surprise is going to be the amount that rates go up once the economy does recover and inflation becomes an issue. I’ve been talking to a large number of people who want to use a home equity line (at prime or prime minus .5%) to pay off their mortgage. They would lower their rate down to around 3%, but my recommendation would be to do that only if they can plan on paying the balance off within 1 to 3 years. My feeling is that any longer term than that will make it too expensive because of the way rates are going to jump up. For more thoughts on that, see what I wrote a couple of weeks ago about the “W” recovery.
Information received since the Committee met in December suggests that the economy has weakened further. No surprise there. Industrial production, housing starts, and employment have continued to decline steeply, as consumers and businesses have cut back spending. Furthermore, global demand appears to be slowing significantly. Conditions in some financial markets have improved, Really? Which ones? in part reflecting government efforts to provide liquidity and strengthen financial institutions; If you look at Bank of America and Citi, you can’t tell that the financial institutions are stronger, nevertheless, credit conditions for households and firms remain extremely tight. The Committee anticipates that a gradual recovery in economic activity will begin later this year, but the downside risks to that outlook are significant. Translated – we hope things get better later this year, but we really don’t know, so don’t blame us if it takes longer.
In light of the declines in the prices of energy and other commodities in recent months and the prospects for considerable economic slack, the Committee expects that inflation pressures will remain subdued in coming quarters. Moreover, the Committee sees some risk that inflation could persist for a time below rates that best foster economic growth and price stability in the longer term. Inflation could persist below rates that foster growth. What does that mean? That means that deflation is more of an issue than inflation.
The Federal Reserve will employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability. We’ll do everything we can! The focus of the Committee’s policy is to support the functioning of financial markets We’ve got to get the banking world moving or we’re in really big trouble! and stimulate the economy through open market operations and other measures that are likely to keep the size of the Federal Reserve’s balance sheet at a high level. They say this like it’s a good thing but a high level of the Fed’s balance sheet isn’t a good thing. The Federal Reserve continues to purchase large quantities of agency debt and mortgage-backed securities to provide support to the mortgage and housing markets, and it stands ready to expand the quantity of such purchases and the duration of the purchase program as conditions warrant. We’re buying mortgages in order to keep Fannie and Freddie going and to try to lower rates. The Committee also is prepared to purchase longer-term Treasury securities if evolving circumstances indicate that such transactions would be particularly effective in improving conditions in private credit markets. Read that last sentence carefully. Does improve conditions in private credit markets mean lower rates? Not necessarily. It means that if the Treasury market and associated credit markets seize up, the Fed will buy Treasuries to keep things moving.
The Federal Reserve will be implementing the Term Asset-Backed Securities Loan Facility to facilitate the extension of credit to households and small businesses. The Committee will continue to monitor carefully the size and composition of the Federal Reserve’s balance sheet in light of evolving financial market developments and to assess whether expansions of or modifications to lending facilities would serve to further support credit markets and economic activity and help to preserve price stability.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Donald L. Kohn; Dennis P. Lockhart; Kevin M. Warsh; and Janet L. Yellen. Voting against was Jeffrey M. Lacker, who preferred to expand the monetary base at this time by purchasing U.S. Treasury securities rather than through targeted credit programs.
Summary – The Fed essentially said, “They’ll do what they can” to keep the markets moving and to get the economy back on track. They didn’t say that they were buying any particular assets to lower mortgage rates or lower any other costs of credit. They will do what they can to keep credit moving but they aren’t promising that what they are doing will lower rates.8 comments
I haven’t had a good rant in a while… and unfortunately, I don’t have enough time to have one right now – so the Reader’s Digest condensed version will have to do.
Most agents who have been in this business a few years or more know when something doesn’t look right. We’ll see something – and although we don’t know the underlying logic… we instinctively know it’s just not right.
This morning, I was perusing some rental properties for a client. As with listings for sale, it’s not uncommon to find some agents who are offering a ridiculously low co-broke. This morning was no different.
This particular agent is offering a 10% co-broke if you show the property. Since many brokerages charge transaction fees – the co-broke on this listing could easily be less than the transaction fee. Kinda gives “co-broke” a whole new meaning.
Now don’t get me wrong – a 10% referral fee for sending the client to a property shown by the listing agent is just fine. But 10% for bringing the tenant and showing the property is a non-starter – I don’t care who’s doing the paperwork.
Just for giggles and grins – I pulled up this agent’s recent history. One sold listing and more than sixty leased listings. Every single one of them offered a measly 10% co-broke… and all but two were leased out by – drum roll please – the listing agent.
[snarky comment] What an unexpected surprise! [/snarky comment]
Of course, both of those co-oped listings rented out for full asking price… while nearly every single one of the double-ended listings involved a rent reduction… sometimes several hundreds of dollars in rent reduction.
Now maybe you think that I’m just whining about some agent who is too greedy to offer a more generous co-broke – that’s fair. Maybe you think that I believe that a co-broke of 25% is more appropriate. I will tend to agree with you on both counts.
But there is an underlying ethical problem here.
When you list a property for lease and offer a ridiculously low co-broke – you are denying your client the best possible chance for achieving a quick lease at the highest possible rent.
And therein lies the rub.
If you are an agent who practices this kind of real estate – you should be ashamed of yourself. This behavior may not be illegal… but like any other kind of criminal, merely changing the law probably wouldn’t deter you from being a dishonest cheat.
If you’re a home owner who has run out of time to sell your home in a declining market, and you’re considering renting your property to stop the red ink from flowing – it’s time to wise up.
Listing your property with an agent to get it rented quickly is a good idea – but if you don’t know your agent well enough, maybe you should remove the incentive for them to be disloyal. Make sure your rental listing agreement includes language that guarantees a reasonable co-op brokerage fee is offered.
Without it, you might get an agent like the one I found this morning who would rather your property sit vacant than lose 15% of one months rent in commssion.
I put a call in to an agent who has a rental listing. Here’s the exact conversation
“Hi this is Zack”
“Hi Zack – Doug Quance with Solid Source Realty here… how are you?”
“I’m doing well, Doug – how are you?”
“I’d be doing better if you told me your rental listing on Bonaventure was available and that you’re offering more than three dollars on the co-op”
“That’s what I’m offering.”
“Are you serious?”
“Yes, I’m serious.”
“You have a nice day.”
Three dollar co-broke on a $2500/mo rental property! My client got a big chuckle out of that.11 comments
The rest of the real estate industry might be Pinocchio — false in every particular — but nothing prevents you from being genuine
Real estate is the most unbusinesslike business in the history of business.
I don’t want to defend that statement comprehensively, because it’s late and I’m tired, but I can offer some data points.
When we sat down with Greg Tracy, I argued to him that licensing inhibits the kind of competition for reputation that we expect and depend upon when deciding which restaurant to go to, for instance, or which auto mechanic to use. Instead, in real estate, after 90 hours of nonsense classes, we say, “Here’s your license, kid. Get out there and wreck someone’s finances!”
I met with a new buyer client on Wednesday, and we had a wonderful time cataloging all the things Realtors and brokers would do if residential real estate were organized like any other sort of business.
What kinds of things?
If real estate were a real business, Realtors would market the damn product, instead of engaging in two or three acts of rain-dancing and then waiting — for months or even years — for the rain to come.
If real estate were a real business, Realtors and brokers wouldn’t be so transparently mercenary about using, abusing and burning through their clients. One of the huge benefits of real estate weblogging is that Realtors are openly discussing the tricks they deploy to strong-arm their “leads.” In no other business do vendors have such contempt for consumers.
(Incidentally, although I say this all the time, apparently no one believes me: Consumers read industry-focused weblogs. When you admit that you do certain things to “force people to call,” you’re not telling them anything they didn’t already know about the real estate business.)
If real estate were a real business, commissions would be divorced and incentives would be aligned to put the agent and the client on the same side in negotiations. The longer the real estate industry delays in reforming its practices, the greater the opening it offers to vendors offering a better or cheaper alternative to traditional real estate.
I love it when I really get to talk to my clients, because I conceal nothing from them. We do well by doing good: This is not only the right thing to do, it ends up being very good marketing for me and my brokerage, because my transparency takes away all of the unnamed fears my clients might have. This again is what we would expect from any sort of real business — which to say any business that is not founded upon secrets and lies.
My client and I were meeting at a Starbucks, and I got there early. I bought a latte and a cookie, more to pay rent for the table we would be using than anything else.
The kid who made my coffee was obviously working her first day “solo” as a barrista. She was doing everything right, but she was slow and methodical about it, working from conscious memory rather than from the kinesthetic memory we expect in an experienced barrista. The coffee was good, but that young woman would not have been given command of the bar at a busier time of day.
And this is how real businesses are run. Entry-level employees are given few responsibilities and a lot of supervision. Day by day, task by task, the new hire learns more about how the business is run and is given more and more freedom to work without direct oversight.
Work your way up to it, and you get to be a barrista. Get good at that, and you can work the drive-through bar. Demonstrate that you know how to put the company first and you can be a crew boss, a shift manager, an assistant manager, a store manager. But every promotion is based on mastery of your last job. And if you screw the pooch in the new job, you’re probably fired for good.
That is the way a real business is run.
I just closed a transaction with Those Calloways, which I think is the busiest team in the Phoenix market. They don’t do all the things we do to market a listing, but the things they do, they do all the way. That pays off in reputation, as you might expect, with the result that they are by now pretty much unassailable in certain Scottsdale zip codes. What impressed me most about them was the quality control built into their systems — and if “quality control” is a term you never thought to associate with the real estate business, you’re not alone.
The residential real estate business is Pinocchio, a marionette delivering up a pantomime of a real business. We cling to our licenses and to the broker’s license to steal and to the withholding tax exclusion and to all of our secrets and lies, but we don’t have a hand free to grasp the kinds of relationships that real businesses are based on. Everyone knows that Pinocchio is a liar, and so people use us because they have to — for now — but no one ever really trusts us. We were so afraid of honest competition that we structured our business in such a way that no one can trust us — nor should they. Why do people think Realtors are out to fleece their clients? Because that corruption is rife and rampant in the DNA of the tree we were carved from.
The best part of this comedy — and a marionette can never know that it is the object of comedy — is that we think consumers don’t see right through us.
The client I met with on Wednesday has been following BloodhoundRealty.com for more than a year. He came across us at one of our open houses, with the custom yard sign being the precipitating factor that brought him through the door. He’s been reading our weblogs, including BloodhoundBlog, since then. He was one of the ninety-and-nine I talk about all the time. He contacted me when he was ready to work, and he wanted to meet me to be sure I live up to my rhetoric.
And: His business is still mine to lose. All I have to do is not deliver on my promises. But if I live up to the expectations I have set, we will have a relationship that will last for years — much like the relationships he has — and you and I and everyone have — with our attorneys or our accountants — or our doctors or dentists or auto mechanics or our favorite restaurants.
And that is the way a real business ought to be run.
It’s been fun to read about all the young brokers and their plans for adding agents. We’re scared to death of adding new people. The quality control issue is too important to us. When we do add people, we’ll add them in the way Starbucks does, a little bit of new responsibility at a time, coupled with a lot of supervision. We don’t need to be the biggest brokerage in town, but I will be damned if we’re less than the best in the way we treat our clients.
Is this the future of real estate? You tell me. In every marketplace there is always a better and a worse, and there are always people wise enough to shop for the better. No one sorts through the melons at the supermarket so they can buy the bruised one. But one of the huge marketing successes of the real estate business has been to dissuade people from shopping on the basis of quality — of the reputation for quality. Teams like Those Calloways, and, to a lesser extent, like BloodhoundRealty.com, can do a lot to help people understand that there is a difference in the quality of representation your money can buy, and that it’s worth your while to pursue the best.
But come what does, no matter how well we might or might not do, virtue is its own reward. Despite the licensing and the income tax safe-harbor and the secrets and the lies, despite the way the deck is stacked, there is nothing that prevents you from running your real estate business like a real business. I hope and pray that Pinocchio gets laughed off the stage. But even if he does not, you can still be real, genuine, authentic — and therefore trusted by your clients.
Mail from Ryan Ward in Atlanta:
Not sure how well you know Kevin Warmath. He’s an agent in Alpharetta near me and he came to your Bloodhound event last fall. Two nights ago while with his family, he had a heart attack and was rushed to the hospital where they induced a coma. As of a couple of hours ago, they took him off of support. I’m not exactly sure about any details, but, it doesn’t seem positive at all. Kevin was one of your Black Peal Divers contest winners some time back. He will likely be leaving behind a wife and three young daughters. Not sure if it’s something you want to mention on your blog, but, you might, so I thought I’d let you know. Here’s all that I know:
As Ryan says, Kevin was one of our Black Pearl Divers last spring. At BloodhoundBlog Unchained in May, we watched him implementing many of the ideas we covered during the conference. Because of his good example, we knew we could expand to a much more hands-on format.
I can’t think of anything to say that’s not stupid and obvious, so I’m better off keeping my thoughts to myself. The first of Ryan’s link will give you a chance to leave a note for Kevin’s family.
Further notice: This was forwarded to me by Deryk Harper from Sydney Ray:
Dear Friends,20 comments
I have just received an update on Kevin and unfortunately it is not a good one. The doctors have done a cat scan and discovered that Kevin’s brain has swollen and that he is realistically no longer with us. According to the doctors he has no chance of survival at this point. They are going to keep him on a ventilator for 24 hours and take him off first thing in the morning. I am truly sorry to deliver this news via email, but I wanted you all to know.
I for one believe that while we may not always understand his ways our God is great and can move mountains even in the gravest of circumstances. I ask that today you pray for a miracle on Kevin’s behalf, for a miracle is what we will need to keep him. Please also continue to pray for strength and understanding for his family as they endure this battle.
Social media marketing: As the Whores of Babble On take over, I’m re-enrolling at the Old Skool House
I’ve changed my mind about this. I mean, I don’t hate twitter, but I do hate what twitter has become.
See, I have this thing about advertising. I think it’s safe to say that my online reading, my television viewing and my radio listening, are driven in large part by the absence of advertising. Funny, because I love advertising and a good ad is a work of art. But here’s the thing, how often do you see a good ad?
If you follow me on twitter you know that one of my favorite television channels is TCM- Turner Classic Movies. Yeah, I like movies, and TCM is commercial free. It’s hours and hours of commercial free television, and I love that.
Pay Per Click would never work with me because I have trained myself not to look at the right column of my online viewing. The ads you put on your blogs? Couldn’t tell you what they are- I refuse to look at them- it’s just a lot of visual noise. Slam too many ads up there, and I’m no longer a reader. Am I alone?
We love social media, but we are getting it all wrong. Social media- a way to connect with a mass of people- has become a giant cesspool of vendorsluts and their ads. There is a huge difference between you and I connecting, and you and I selling and buying. If I buy a magazine off the news stand, I know I’m paying for advertising, but I’m also not trying to create a relationship with the publisher. However, if I stop by your blog, or follow you on twitter, or friend you up on facebook, I, being the nice warm person I am, really would like to get to know you better. I naively make that assumption about you as well. So when you start pimping your blog on twitter, or advertising products, that puts me on guard that you might be more interested in selling something. Is it just me who thinks like this?
Putting ads all over the place? Fine. You don’t have to defend yourself to me. Pimping your blog is certainly legal, and quite common- in every sense of the word- and I’m obviously not your target market, but that doesn’t mean I have to like it, nor does it mean I have to support it.
The people who are playing in various sandboxes and kiddie pools online are ready, willing, and able to connect, but here’s what we forget- this doesn’t make them a lead. It makes them a person. A real person with a real need. Stop shoving your crap down my throat. I’m a nice person- a nice person who doesn’t like be inundated with advertising when she’s trying to connect.
Here’s what is going to happen, and I’m thinking that I would welcome this sooner rather than later: someday we are going to have to pay to have ad-free zones on the internet. If you want to sit quietly and connect with someone on a real level? Without being asked to retweet, stumbleupon, or digg something? Without being subjected to intrusive ads touting botox and email newsletter functions? You’re gonna have to pay for that luxury. But the good news is that just like buying a magazine, or watching NBC instead TCM, I will know from the start exactly what to expect from our connection. Are you functioning in the vendorslut zone? Fine. Let’s connect there on a very superficial level.
If I want to connect with 800 salespeople- I know where to go. If I want to connect with real people- you know those people who are funny and smart and passionate? Those people who really add to a conversation, who push me to be my best? I know where to find them as well.
It’s breakfast at Tiffany’s for this web 2.0 party girl. I may have social media fatigue. Lucky me, I’ve dusted off a Tiffany lamp at an old skool desk and the light it gives off is absolutely stunning.38 comments
Rhonda Porter, of Mortgage Master Service Corp. in Seattle, is speaking at BloodhoundBlog Unchained Seattle, on February 12, 2009. BloodhoundBlog readers see Rhonda commenting here and Rain City Guide readers know her as the resident mortgage guru. I know her to be one of the most savvy Loan2.0 practitioners; that’s why I chased her to speak at Unchained Seattle.
I interviewed Rhonda about what she does that WORKS, not what she does that’s cute. At BloodhoundBlog Unchained we talk about things that are as practical as a jackhammer on a construction site. When you hear Rhonda, you’ll learn that she ‘s a lunch-pail carrying, hard-hatted foreman, building relationships through her social media efforts.
If you haven’t reserved your spot for Unchained Seattle, you just might be shut out. Over 75 people have raised their hands and seats are going quickly. Contact Scott Cowan if you’d like to see us on February 12.
The fun doesn’t end after BloodhoundBlog Unchained Seattle! We jumped on the chance to be a sponsor of Seattle REBarCamp, the next day. Todd Carpenter describes the ad-hocratic learning experience that is REBarCamp:
RE Bar Camp is an ad-hoc gathering born from the desire for people to share and learn in an open environment. It is an intense event with discussions, demos, and interaction from attendees
BloodhoundBlogUnchained is proud to be a sponsor of this effort in the Emerald City. Greg and I will be there to join in all the fun!11 comments
You want to get someone’s attention? Try ‘pardon me’. Even a shoe toss is more civil than spitting in one’s face.
It takes some chutzpah to have such an opinion about things and become as successful as Michael Arrington has with TechCrunch. Yesterday he posted about how he’s going off the grid, after the abuse from his peers and critics becomes threatening to his family’s safety.
Luckily my tolerance level for verbal abuse has risen proportionately to our growth, so I can handle most of the verbal abuse thrown our way. I can even handle it when my so called friends decide it’s in their best interest to spread negative rumors about us privately. I believe that it has changed me as a person to the point where I generally don’t trust people until they’ve earned it. Before TechCrunch I assumed most people were essentially good, and assumed that an individual was trustworthy until proven otherwise. Today, its exactly the opposite.
But like I said, I draw the line at being spat on. It’s one step away from something far more violent.
Something very few people know: last year over the summer an off balance individual threatened to kill me and my family. He wasn’t very stealthy about it – he called our office number, sent me emails and even posted threats on his blog, so it wasn’t hard to determine who he was. The threats were, in the opinion of security experts we consulted, serious. The individual has a felony record and owns a gun. Police in three states became involved and we hired a personal security team to protect me, my family and TechCrunch employees.
At over $2,000 a day we couldn’t keep paying for security indefinitely. And the police were helpful but couldn’t do much based on the threats until he acted. We had the option of getting a restraining order but that just tells the person exactly where you are (the places they can’t go). So for a week I was literally in hiding with my parents at their home. The TechCrunch office was empty, and the police made regular checks to see if things were ok. One evening they almost arrested one of our employees who stopped by the office to pick up something.
Seeing my parents fear for their lives and not understand how or why their son was in this position changed me, made me a much less forgiving person in general.
I write about technology startups and news. In any sane world that shouldn’t make me someone who has to deal with death threats and being spat on. It shouldn’t require me to absorb more verbal abuse than a human being can realistically deal with. read the whole article here.
This is unfortunate because it deals with some pretty fundamental values that allow us to be civil to one another. What we have to offer one another when we blog is a personal passion. An opinion. Yes, it’s business and strategy as well, but blogging and new media has offered individuals to thrive in ways we could not thrive before. An individuals voice can be heard with more reach than ever before. It’s a gift we all share, this freedom. A gift that can be accepted of denied, but should never be threatened to extinguish.8 comments
Turning LiquidBlue into steady green: Is it possible to found a new real estate brokerage without going broke?
Cleveland real estate broker John Kalinowski and I have been batting around some ideas of his on how to structure his new brokerage to make it work well for everyone — clients, agents and ownership. Surely I’m not the best person to ask about this, since we are doing everything we can to avoid adding agents. So John decided to throw it out to the Bloodhounds — contributors, commenters and readers — to see if y’all can come up with better ideas.
Here’s John’s epistle to the dawgs:
I’m reaching out to you and the Bloodhound community for a little advice as I prepare to take the next step in the fascinating world of real estate brokerage. I left RE/MAX in early December to start Liquid Blue Realty with a secret weapon of sorts, a custom sign sign idea built around your original concept. So far the response has been beyond incredible. It takes a ton of work to create each sign, and they’re not cheap, but the attraction is unlike anything I’ve seen in our area.
Our market is in a state of transition, just like everywhere else, with agents concerned about whether or not their brokers will survive, and struggling with monthly desk fees and transaction charges. Right now I have one other truly excellent agent working with me, along with two part-time admin assistants who have the ability to work full time. I’m ready to start talking to other agents, and I plan on being very selective in who I choose to join our company. Our approach to listing homes is an important part of our business, and providing a reliable, repeatable listing experience to the public is one of my main goals. No matter who a seller works with at our company, I want to make sure they receive the same attention to listing detail and transaction management as I bring to my clients.
Where I’m stuck is how to best create a compensation plan that makes sense, particularly with all the extra services we intend to provide to our agents. We will partner with them on their listings, taking care of many of the details that help create a focused, effective marketing strategy. To keep it short, you can see what we offer on our Careers page.
My thought is that we’ll offer two simple commission splits. One for listing transactions and one for buyer sales, with no additional transaction, E&O, or monthly fees. Agents will not have to worry about writing a check or receiving a monthly statement, and much of the overhead and stress that holds the majority of agents back will be handled by the company. Ideally, I imagine creating something like a mini Russell Shaw Team within a brokerage, possibly with listing and buyer agents handling certain territories and receiving all company-generated leads for their area.
I also intend to have one program, with no secret back-office deals to lure agents. Everyone will be under the same structure, and we intend to attract, not recruit agents. We’re completely virtual at the moment, and I don’t expect to sign a lease for any sort of expensive office space in the near future. Small, satellite offices, possibly part of an office conglomerate where you basically pay for a small space and share a conference room is probably where we’ll land.
How can the Bloodhounds help?
I’m looking for input from fellow agents and brokers as to what they consider to be a fair split, with no additional fees, based on all the things we’re offering. With one split for listings and another for buyers, what do Bloodhound readers think is the best plan that allows both the agents and brokerage to prosper, particularly when working together in a true team arrangement.
Thank you so much for your help!
Broker – Realtor
Liquid Blue Realty
It happens that Cathleen and I were treated to dinner last night by Greg Tracy of BlueRoof360.com, and he had some interesting thoughts on the general idea of how to manage a modern brokerage. Perhaps he’ll have time to jump in with thoughts of his own. I may shed a notion or two, too, but I don’t think my ideas will scale well. That leaves you. What do you think John should do?
Twitter is mostly useless. Mostly. For Realtors, it quickly descends into an online echo chamber of people telling one another how great they are, and how they’d never cold call…and oddly, how much their business is down, and how many people screwed them out of something. What a drag. Realtors, PLEASE. Support each other, don’t spread the misery.
Twitter is mostly useless. Most Realtors are also mostly useless, so A would follow B. Now, I’ve been on the record saying twitter is mostly useless. I do it anyway. This will get mumbling idiots crying, “HypoTwit” as if it was the worst sin I can commit. Whatever, I’m here to win. Think whatcho like. I intend to continue, and I intend to sift through the useless BS and make the most out of Twitter. I intend to make $25,000 on Twitter in the next 65 days. Any Realtor could, so could any mortgage broker, or any of us revolting ‘vendors.’
The plan is untested and I know it will work. Watch:
1.) Add people in my area/field. For a Realtor® it’ll be people in the area. A chorus of other Realtors® thinking they are cool does nothing for their AMEX bill, and creates a false sense of efficacy. Cut through that.
2. Have an auto responder. http://tweetlater.com is. I’m genuinely interested in people, so I invite them to send me their best blog post. I’m going to something better soon, but you get the gist. (follow me, I’m @genuinechris).
3. Hat tip to the mighty Brian Brady. Pick up the phone. I get 6-9 adds a day. About 3 are Internet marketing douchebags that offer no value. About 4-6 are worthwhile people in various stages of Social media development and proficiency. These are the people I’m going to call. Hi, thanks for adding me on Twitter, is there anything–anything–I can do for you right now? Think of me when you….
4. Add EVERYONE into Heap. Connect on LinkedIn/FaceBook (and MySpace, while it still lasts). Fill in the puzzle, try to get ’em everywhere else, and get some type of newsletter out. Call ’em on a regular (six months) basis. Connect people with others that stand out, help whenever I can. My $$ will follow, and easily. And, I’ve gotten a new batch of folks to call, to help, and to work with.
ANYONE, Realtor®, Mortgage Guy, Vendor, whatever can use this strategy. It WILL work, and the phone call will get you noticed, retweeted. Oh, sure, some people might be taken aback. Some folks might reject me. But it won’t happen that often, and people will feel way more connected to me. And if I get 20-25 real people a day? Fine, great. I can write down how I can help in HEAP.
Once you have a big pile, rate the people A-D:
a- people you have done business with or respect.
b- people that you haven’t done business with, but would like to.
c- people that you know little about/can’t recall.
d- people you avoid like the plague (anyone who lies to me, even a little, goes on this list).
Create an appropriate follow up plan.
If you average 1 valid add a business day, and call that add each time, you’ll have ~255 new contacts per year. And if you get a deal for every 50 contacts…
…that’s how to use Twitter.
I’ll post my 2 month results at the end of March. And if you add @genuinechris, you can expect a call.20 comments
I am not a gay man but I’d play one on television if I thought there was a Golden Globe in it for me. In fact, my wife insists that her next husband will indeed, be a gay man and I’m cool with that as long as I’m not still around to witness all the fabulous shopping thrown back in my face. And just so you know that this Op-Ed is not coming from a squinted biased eye, I’m hereby going on cyber-record to announce to the entire Blogosphere that our bride’s maid was a male fashion designer, my best man was a lesbian, and we first encountered our bisexual ceremonial minister at a coffee shop in Boystown. If you don’t believe me, just ask our poor parents. And perhaps this is why a certain Jason Wu recently ‘Requested’ my Friendship on Facebook. (The fact that I even know who the man is serves as the premise for this piece.)
And thus, without doth protesting too much, if you ever met me in person you’d clearly see that I’m not physically fit enough to be gay—or at least, not the sort of gay I’d prefer if druthers were in order. I do know a little bit about fashion, though, and I have to declare that I am totally pissed that Michelle Obama did not wear Maria Pinto at the Inauguration. There, it’s out. I said it.
Allow me to digress. Maria Pinto is a well known Chicago based fashion designer who studied under Geoffrey Beene. She is the twin sister of my best friend and managing broker, Joe Pinto, and a personal friend and designer-of-choice of my wife, Mona. For the past 18 months, none other than the Michelle Obama, has been frequenting the Pinto showroom for complimentary couture and thus, dangling the possibility of wearing Maria Pinto for The Inauguration. There were nods and winks but I can say no more. And since ‘ The Dress ‘ will ultimately hang in the Smithsonian alongside the likes of Jackie Kennedy and First Ladied others…well, needless to say…this was all a pretty big deal for a lot of people here.
And so, all collective eyes in Chicago were glued to the television screen this past Tuesday. Maria had been picked up in a limo and whisked away to DC just one day earlier. The buzz in our social circle was ear numbing; the text messages, encoded and endless. We were all sworn to secrecy. I microwaved popcorn and took the entire day off. Mona buried one of my Saint Joseph statues in the pocket of a Maria Pinto cape she paid $1800 for. I called my bookie and tried to get the over-under on a side bet. Evening finally fell and the first of a dozen fabulous Balls began. The cameras panned left and the First Lady appeared with something sparkly strapped across her back. All at once, things did not look promising (on so many different levels). “IT’S NOT HERS.” my iPhone immediately pinged. And alas, it was ultimately a little known designer named Jason Wu, who got The Inaugural nod while the rest is, and will forever be, haute history.
So, to say the least, I was a bit surprised that Mr Wu himself requested my FB Friendship when I checked my Text messages this morning. I logged-in and noticed that we also had 34 ‘Friends in Common’—all real estate bloggers and not one of them fashionistas from what I could tell from their pictures. Hmmm….the new ‘Request’ reeked of the same Donald Trump icon that I couldn’t shoo away from my BlogLog widget a few years back. I went to my Facebook Dashboard and searched for ‘Jason Wu.’ 500+ entries came back. Duped again.
But still, I find myself reticent to click ‘Deny’ although it seems like every time I post one of these types of pieces, a handful of soon-to-be ex-Friends promptly ‘Remove’ me from their rosters. (Unsubscribed, as it were.). It’s not cool to shun those who identify with the fashion elite, I decide. Anyway, I always welcome a hot tip on a truckload of Man’s Purses; COACH, preferably, if you’re taking notes.
postscript: My wife just walked into the room and asked me if I wanted to go for a Mani-Pedi. Am I dead yet?
How many remember the movie Back to the Future? I always liked the play on words in that title and I am liking it even more lately. Why? Because as agents that is exactly what we are doing: going back to the future. I believe the marketing theme for 2009 is going to be “old school.” Going back to the “old school” ways of marketing… done with the tools of the future: back to the future. (Caveat: the future for me has a very Mr. Magoo aspect to it. I appreciate the high-tech agents among us keeping the laughter down to a mild snicker.) Chris Johnson understands “old school”, he was bleeding it here and here. Jeff Brown understands old school – actually, Jeff probably learned this stuff when it was just “school”…
- Touching your sphere of influence on a consistent basis is “old school” – using emails, webinars and blogging to do it is the future.
- Tracking your marketing, your prospecting and your ROI from both is “old school” – using powerful software to do so is the future.
- Picking up the phone and calling past clients or mailing something personal every day is “old school” – knowing there is no substitute for getting belly-to-belly is the future.
And WE are the future. Those of us still here. Our profession lost a lot of people last year. Our profession needed to… Many of us suffered just to make it this far and some of us are suffering still (although some flourished… think about that). But the point is, we are here. We stuck it out because this “real estate thing” isn’t something we do on the side or because it’s easy money. We are her because this is our profession. We now reap all the opportunities of 2009… AND the responsibilities. It is our charge to bring integrity and passion to everything we do. You, all of you, are the heroes and don’t let anyone tell you otherwise. You help people find their way, now more so than ever before, through a giant minefield of potentially devastating mistakes on their way to buying or selling what is probably the largest financial investment of their lives. Pretty heady stuff.
I say Congratulations to each and every one of you. When you lay your head down at the end of the day, remember this: you are the walking, talking, living proof of this truth: “Tough times don’t last, tough people do.”32 comments
I had fun today because I got to hang out with a bunch of mortgage salespeople. I drove up the 5 to Irvine, epicenter of the sub-prime mortgage industry, to see the High Performance Strategies Seminar, hosted by David Bartels and Greg Frost. David Bartels is an executive with Loan Magic . Greg Frost is America’s first billion dollar originator. The cool part about their accomplishments is that they do the right thing. Both are highly-principled salespeople who hustle.
David impressed me with his definition of our job as a “borrower’s advocate”. He suggested that we would do well to align ourselves squarely with the borrowers. While he never suggested that our lender partners are the enemies, his message was quite clear. Originators need to help borrowers FIRST. Banks are so puckered today that borrowers need a guide to help them interpret loan offerings, argue their case for approval, and secure the best terms possible. When mortgage brokers fully embrace that concept, we will have earned the public’s trust. Here’s David on Mortgage Sales Blog:
For some reason, originators get offended when a potential client wants to know detailed information about the terms of their new loan prior to completing a full application.
The mortgage rate question is a buying sign, not a shopping sign.
They ask about rates because all of the advertising in the news and media leads borrowers to believe that mortgage rates are a consistent means of measuring one broker or banker over another.
In reality, most borrowers have more important criteria for selecting a loan officer to do business with, like whether or not they can trust you.
The rate question is basically a qualifier. They’re not shopping rates, they are shopping you. It gives the borrower some insight into you level of transparency and ability to communicate on their terms.
How you answer the rate question will ultimately determine your success or failure at earning a borrower’s business.
Think about it, if a potential client is willing to speak with you about rates, then they are obviously interested in opening a dialogue about how your mortgage options will impact their financial goals.
What would happen if we encouraged borrowers to apply for the terms they wanted? I remember when I started in this business. I used to ask customers what terms they hoped for and put it on the loan application. I started with their best expectation and explained that we would put it on paper and run it by an underwriter and pricing manager. We used to do that before automated underwriting systems were implemented and the business was easier. Lenders sold us on the “instant approval” power but transferred the adversarial relationship from them to the originator; AUS positioned the originator as the bad guy. Borrowers see the loan application as a “closing technique” while originators know that a loan application is merely a starting point. A common goal then, might just bridge the trust gap so that both borrower and originator “get what they want”.
David continued by reminding us that while borrowers like to “shop”, only one in seven actually select a mortgage offering based upon the “best” terms. We all know that it is mathematically impossible to receive the “best” terms so it is clear that borrowers are shopping originators rather than mortgages. Putting the borrower in control and giving her good explanations for the underwriting and pricing decisions helps to build the trust borrowers so desperately want.
Zillow Mortgage Marketplace attempts this with their anonymous loan requests. Originators are scared to offer the best terms for fear of the anonymous “ratings system”. The result is an electronic quote fest that rarely results in the correct loan terms for the client. How do I know this? I’ve watched Zillow customers deliberately choose more expensive loans because their office buddies were “coaching” them. Adversarial relationships, whether industry encouraged or consumer initiated rarely result in the best solution.
Jeff Corbett’s upfront fee negotiation falls short as well. His Ratespeed product encourages borrowers to grind originator compensation to the point where only the least talented originators will accept the engagement. Lesser talented originators often compromuse suitablity for expedience and that results in an inappropriate loan solution.
I like the old-school concept of a “customer’s man” for our industry. David Bartels suggested that “hope” is very much a strategy for borrowers today. Combining the best features of ZMM (open quoting) and Ratespeed (transparent fee disclosure), with the customer advocacy Bartels pleaded for today, offers a relationship that allows both originators and borrowers to “get into a relationship” and start solving problems.
Customers are reasonable; they understand that we need to be compensated. Fighting for customers is how we should earn our fees. Lender defense doesn’t solve the problems of the people who ultimately pay our bills. Borrower advocacy does.
NEXT: The Genius of Greg Frost49 comments
Before everyone goes off on me here, let me state CLEARLY that I have no confirmed knowledge of the two joining forces. No marriage license, no paparazzi photo of one proposing to the other. No formal announcement arriving in the mail. So is there a wedding? Shacking up?
Who knows…only the two people involved.
I have no “scoop” here…but enquiring minds want to know. 😉
Jon Karlen reported some interesting happenings here. That was a while ago. So AR is looking to pick up MLS feeds.
Then a thread popped up a couple of days ago at Real Estate Webmasters here.
Read the links in there on Active Rain as well. You will see what’s making people think that at a BARE minimum, there’s some reason to believe that something is going on.
From my vantage point, I can see benefits to both entities if they were to tie the knot, shack up, or form some kind of alliance, either publicly or just a backseat (so to speak) sort of thing. From their point of view it would be great. They are certainly each primping themselves for the date described in the REW post.
From a REALTORS vantage point, and from those who have written content for months and years on AR or Trulia, would this be a good thing? My guess is the REALTOR community would say a resounding NO. From an Search Engine perspective, I’d agree. Big time.
Two questions. To AR & T execs: Are you in talks? To REALTORS: Does it matter to you?
I have far more questions than answers, and I think it will be interesting to see it play out…
More (if) as this develops.27 comments