{"id":549,"date":"2006-10-17T17:07:19","date_gmt":"2006-10-18T00:07:19","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=549"},"modified":"2006-10-17T20:05:33","modified_gmt":"2006-10-18T03:05:33","slug":"contra-freakonmetrics-the-big-picture-in-real-estate-negotiations","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/549\/contra-freakonmetrics-the-big-picture-in-real-estate-negotiations\/","title":{"rendered":"Contra Freakonmetrics: The Big Picture in real estate negotiations . . ."},"content":{"rendered":"

Taking on Mark Nadel’s white paper on real estate commissions<\/a>, Kevin Boer at Three Oceans Real Estate<\/a> points out that there is more at stake than any one particular negotiation:<\/p>\n

Successful agents, however, know that a solid business is built on long-term relationships with satisfied clients. If a past client indeed thought his Realtor had left $10,000 on the table, that would be the end of that relationship. No more future deals, and no more future referrals.<\/p>\n

For agents who think long-term, however, the math goes something like this:<\/p>\n

20 extra hours of work =<\/p>\n

75% greater chance of doing another transaction with that same client in 5 years<\/p>\n

+<\/p>\n

75% greater chance of getting 1 referral a year for the next 10 years from that client.<\/p>\n

No matter how you slice that one, that’s a lot of money the Realtor is leaving on the table by being shortsighted.<\/p><\/blockquote>\n

This is a reasonable argument, and a one-off transactional analysis is common in economics, where entrepreneurs succeed by taking account of The Big Picture.<\/p>\n

To be fair to Nadel, he suggests short-term incentives to offset what he views as short-term disincentives. His suggestion comes pretty close to a net listing, though, a type of listing contract that is frowned on by regulators in Arizona.<\/p>\n

Here’s why: I convince Mrs. Newlywidowed that her long-time family home, now an empty nest, is only worth $90,000. I offer to sell it “for free” unless I can get more than $90,000, in which case I will take $.50 on the dollar for every dollar over $90,000. I sell the home for $300,000, taking $105,000 in commission, leaving $195,000 for Mrs. Newlywidowed, where she could have netted $282,000 or more.<\/p>\n

That notwithstanding, Kevin has a fun take on this idea<\/a>.
\n<\/p>\n

Technorati Tags: blogging<\/a>, compensation for buyer representation<\/a>, disintermediation<\/a>, real estate marketing<\/a><\/p>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Taking on Mark Nadel’s white paper on real estate commissions, Kevin Boer at Three Oceans Real Estate points out that there is more at stake than any one particular negotiation: Successful agents, however, know that a solid business is built on long-term relationships with satisfied clients. If a past client indeed thought his Realtor had […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,4,6,5],"tags":[],"class_list":{"0":"post-549","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-blogging","7":"category-disintermediation","8":"category-marketing","9":"category-real-estate","11":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":16285,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/16285\/my-client-went-shopping-for-houses-on-trulia-com-and-only-75-of-those-she-found-were-bogus-listings\/","url_meta":{"origin":549,"position":0},"title":"My client went shopping for houses on Trulia.com, and only 75% of those she found were bogus listings…","author":"Greg Swann","date":"March 15, 2013","format":false,"excerpt":"My note to her: \"Trulia and Zillow both present inactive listings as though they were active to fool the public into thinking that they have more inventory than the agents they exploit for advertising money, even though their listings come straight from the MLS systems. Mere real estate brokers would\u2026","rel":"","context":"In "Dirty Laundry"","block_context":{"text":"Dirty Laundry","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/dirty-laundry\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":371,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/371\/project-planning-101-in-the-real-estate-industry-putting-the-client-first\/","url_meta":{"origin":549,"position":1},"title":"Project planning in the real estate industry: Putting the client first . . .","author":"Cathleen Collins","date":"September 23, 2006","format":false,"excerpt":"Responding to my post on the spec-home I'm working on right now, John Keith commentedI still don't get where you guys are coming from. Is it the actual dollar amount that bothers you, the percentage, the feeling that agents don't add value equal to their commissions, or what? How does\u2026","rel":"","context":"In "Blogging"","block_context":{"text":"Blogging","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/blogging\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":11202,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/11202\/agents-of-change\/","url_meta":{"origin":549,"position":2},"title":"Agents of Change","author":"Glenn Kelman","date":"February 8, 2010","format":false,"excerpt":"Don Stewart posed an interesting question this morning about whether real estate is changing top-down from the broker or bottoms-up from the agent. In a post about how Redfin sees the real estate industry changing, Don suggested we had focused too much on the laws, the brokers, the MLS data\u2026","rel":"","context":"In "Dual Agency"","block_context":{"text":"Dual Agency","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/dual-agency\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":6885,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/6885\/how-can-you-benefit-from-the-sexiest-search-site-in-the-real-estate-20-world-without-becoming-an-employee-redfincom-is-going-into-the-referrals-business\/","url_meta":{"origin":549,"position":3},"title":"How can you benefit from the sexiest search site in the Real Estate 2.0 world without becoming an employee? Redfin.com is going into the referrals business","author":"Greg Swann","date":"February 11, 2009","format":false,"excerpt":"I had this news last night, under embargo, but I was tied up with geek stuff. The Cliff's Notes: In areas where Redfin.com has MLS reach but does not have its own agents on the ground, starting today it will begin offering client referrals to agents it has screened and\u2026","rel":"","context":"In "Disintermediation"","block_context":{"text":"Disintermediation","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/disintermediation\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":3347,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/3347\/agent-shot-by-angry-73-year-old-former-client\/","url_meta":{"origin":549,"position":4},"title":"Agent Shot By Angry 73-Year-Old Former Client","author":"Doug Quance","date":"July 11, 2008","format":false,"excerpt":"As If This Crappy Real Estate Market Wasn't Bad Enough One of the potential hazards of working with the public - is that you have to work with the public.\u00a0 Most of the time, it's a great social experience - and you'll find most agents to be outgoing and friendly.\u2026","rel":"","context":"In "Real Estate"","block_context":{"text":"Real Estate","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/real-estate\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":3954,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/3954\/looking-for-volunteers-not-for-profit-realtors\/","url_meta":{"origin":549,"position":5},"title":"Looking for Volunteers – Not-for-Profit Realtors","author":"Thomas Hall","date":"August 17, 2008","format":false,"excerpt":"Who wants to be a volunteer? I received a very pleasant courtesy call the other day from a Realtor who represents a property that I showed to my client several months ago. After showing this particular property, my client and I both walked out of the showing stating that the\u2026","rel":"","context":"In "Disintermediation"","block_context":{"text":"Disintermediation","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/disintermediation\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/549","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/comments?post=549"}],"version-history":[{"count":0,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/549\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/media?parent=549"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/categories?post=549"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/tags?post=549"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}