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SD Realtor
ParticipantYes we do agree…
I would say that when I look at cancelled, expired and withdrawn listings, I see a full spectrum of as you would call it, different service brokers where the home didn’t sell. Same with the homes that did sell, we see sales from full service and we see sales from discount brokerages as well. It is all very hard to break it down and see what caused what.
So agreed the main factor is how much does additional market make. So if say there is a brokerage that will do everything a full service brokerage does except brokers tours and open house but that they do it for 1% commission as opposed to 3%. So is that to say that these two facets add a full 2% value to the client who uses a full service brokerage? I am not trying to be flippant. As an engineer I am anal about numbers so I am just trying to do the math.
The fact that you had some listings that got sold prior to hitting the MLS is great. Being able to market a large office that has alot of agents and volume is a tremendous advantage. The first thing I say to all of my clients is what I am not. That I don’t have those resources, that I don’t have a stable of agents working in my office and that this is a major difference between what I offer and what you can get with a large brokerage. I always present them with what I do and what I do not do, and what the advantages are by going in either direction. It is ultimately thier choice. Referring to the math equation I spoke of above, this would definitely factor into that for a case of a large office against a small guy like me. However, I have seen large Help U Sell offices and I don’t think it would work against those.
I found your comments about buyers looking to sue everyone in the case of a leaky roof peculiar. It seems to me that it doesnt matter what the market conditions are, the buyer would sue if there was a leaky roof. The attorneys working for your brokerage would not protect your seller in court correct? The seller would be obligated to hire his own legal defense. They would protect your brokerage. The fact is, the buyer would sue the seller, and perhaps your brokerage. Additionally the seller could sue the brokerage as well. No seller should ever assume they would receive any legal protection for a brokerage. Or am I mistaken…Remember, I am just a junior guy without all the years of experience you have.
ParticipantI would agree with the side that the prices will revert to the mean. I don’t know what that will be but we will all find out. Powayseller and I were talking a bit about this today, that we all should keep the conversation within a local context. That is, each mean will vary for each persons neighborhood. Overall the mean may be a 50% slump over the next 3 years but it is doubtful that beachfront property will slump 50% right? Similarly it is highly probable that other developments will slump over that number. These could be spots that appreciated much faster then other spots, be it condos in UTC to many of our favorite high end Carmel Valley subdivisions. It is all speculative.
So personally I do believe the slump will be big and it will hurt bigtime.
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Other thoughts…. I am not an expert on Prop 13 but as I see it, one of the remarkable failures of prop 13 is that it allows for tremendous tax advantages for commercial and corporate owned properties. I think that the intention of providing relief for individual consumers has worked very well. However, there is TREMENDOUS lost revenue on commercially owned property that has not changed hands for a long time.
Someone can correct me on that…
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Yes if prop 13 were repealed I think it would add a SUBSTANTIAL depreciation factor to the market. As an owner of a few rentals my choice would be to sell them or to pass the hike off in a rent increase.
Several people I know who live on fixed incomes would also be hit in an very substantial manner.
I think there is a way to fix prop 13 so that it would work as it really was intended to work.
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Participantcarlislematthew you could be right… the more I think about it the more I think that some of the recommendations may require more work then anyone has time to provide…
So scratch the advertising section request…
Still I do like Rich’s response… something like that would be cool….
Participantcarlislematthew you could be right… the more I think about it the more I think that some of the recommendations may require more work then anyone has time to provide…
So scratch the advertising section request…
Still I do like Rich’s response… something like that would be cool….
ParticipantPD that is great that by pumping up your CBB you received the two offers. A few questions…
Before you raised your CBB, was it competitive with the other CBBs for the comps that matched your property for sale? That is in your local area, what fraction of CBBs were 2%, what were 2.5% and what were 3% and above? Then what was yours? Also I assume you raised the CBB without changing the price, correct?
Also did you ask your realtor to ask the agents about the timing of the offer? That is, did the offers coincide with your decision to raise the CBB for any particular reason? Did these buyers agents suddenly decide to promote your condo simply because you raised the CBB? Was it the CBB that drew these two offers? I am not saying it wasn’t but trying to find out would be cool.
Again, I am not saying raising the CBB will not help to sell your home. I am just saying analyze things before you do that. All in all the very best way to sell a home is to make it most attractive to all involved. For buyers the most attractive thing is the price and the condition of the home. For brokers the most attractive thing is the commission.
However, what led me to start this post was what I was a statement that had no context, which was simply advice from someone to a seller to simply raise the buyers commission. Which I would agree with as long as the conditions merit that.
sdrealtor –
Your points are well taken… I do agree with you but I also provide the same service when it comes to contractors to prep homes for sale. I have many contacts who paint, do drywall, plumbing, scrape ceilings… etc… I also know plenty of limited service brokerages that do as well. Also I do want to clarify that I also never said that open houses or brokers tours do not sell homes. Again, the key note that I try to ask people to do is to simply request hard data, if it is available, about how much extra value those extra marketing tools provided by a full service broker provide.
Participantno offense take at all…
I do absolutely agree with your statement that the more exposure that you give to a listing, the better. This is ABSOLUTELY TRUE. Yes I do agree that one never knows when or where a buyer would come from.
When I go on listing appointments I also tell people that if they want open houses, they can hold them on thier own, I will give them signs, advertise in the San Diego Union for them in the Sunday open house directory as well for that open house. I also do hold brokers tours for properties that I feel will benefit more from that tour. Personally I believe a brokers tour will be more effective for a home in Rancho Santa Fe as opposed to a home in Lemon Grove. I feel that when you get into higher end homes that you tend to cater to buyers who rely more on buyers agents to find thier homes then the “average buyer”. I feel that the “average buyer” of today would be classified as follows:
– computer savy
– does alot of thier own searcing in realtor.com or similar sites.
– not searching for what I would call high end housingSo when I talk to leads at listing appointments I tell them my thoughts on this and let them make the choice accordingly. If they think that an extra 2% is worth paying for having someone else hold the open house or for a brokers tour, then they should at the very least ask for hard data to show that. If in your listings you have seen that over the past year that the open houses you held and the brokers tours you had contributed to the sales then that is great.
Doesn’t it bother you at all to have your own profession held in contempt by a large segment of the population?
No I do not have all the answers to fix the system but I do think that many of the postings that people make that are disparaging to realtors are more closer to the truth then not. I am not saying realtors don’t work hard because some of them do. However how has the industry revolutionized itself over the past 30 or 40 years? What has justified the tremendous increase in revenues of participants in that industry? While your commission percentage stays the same you would have no doubt made much more money year over year for the past 6 years if you made the same number of sales correct?
So lets run numbers… if you sold a 300k home in 1998 and you got to keep 1.5% so you walked with 4500… lets say you sold 15 homes that year and walked with 66,500. Now 6 years later you have doubled your salary if you did ABSOLUTELY NOTHING different. Your salary just floated with the tide.
This I think is what infuriates people so much. I am sure you are a great realtor. However, how many stories do you hear from clients who complain about thier realtor. How many transactions are you in where you are frustrated by the ineptitude of the other realtor. Yet they have had thier salaries rise with the tide like you have.
I think that you are correct, if the big boys used my there absolutely would be no niche to exploit. I would find something else. However, I also think we would not have as many people who view realtors as nothing more then overpayed car salesman.
Again, I do not discourage people from using Realtors who charge 1%, 2% or 3%. I encourage people to simply ask for hard data when interviewing thier realtor. No disrespect taken at all from your post or your implication that as a second business I provide my clients with substandard service.
Participantbob007 no offense taken at all!
Essentially I do agree with you. I would say however that many industries in our country exist as a product of our society.
If our tax roll was more simplistic I could do my own taxes and would not have to hire a CPA.
I also agree with your statement about the level of skill required for a real estate agent. Sometimes I feel like a broken record because I am consistently complaining about peer in my industry.
However even with all that said, and even though my brokerage is a second business, I do feel I provide a useful service to my clients. I also recieve gracious compliments on my service which does give me faith that what I do is helpful.
So lets dive into some of yoru suggestions. Getting a database together to provide all of the sold information and making it public would be useful. However would it include market time? Would it include cancelled, expired, and withdrawn listings as well? As a Realtor those are other factors that are important to me. When I sit down with clients I think it is important for them to know that sort of stuff. For instance, today a guy that works for a mortgage broker called me to list his house. He showed me a 6 month sales record he obtained from a title company. He wanted to use these comps to price his home. I agreed it was useful but I showed him that for the same 6 month period the sum of expired, cancelled, and withdrawns exceeded the number of sales by almost twice as much. I also showed him that the pending to active ratio was 2 to 9!
Now interpretation of these numbers is not rocket science either. It is very basic. However, it should be pointed out that just posting the solds is (in my humble opinion) not sufficient in determining pricing of your home.
Now when you broke down real estate transactions most of your argument discussed financing. To me one of the biggest problems with real estate today is the close relationship between real estate and financing. I only do real estate and I do not do loans. In fact the transactions that I have the most problems with are the ones where the broker on the other side is a mortgage guy, not a Realtor. I absolutely believe that these industries need much more seperation. However if you look at a closing statement the sellers closing statement has nothing to do with the buyers financing. Sellers fees generally include splitting escrow, purchasing title insurance for the buyer, county transfer tax, (in SD it is 1.10 per 1000 bucks), buyers home warranty, natural hazard and zone disclosure report, pest control report, transaction coordination, and any payoff fees you may have for paying off your lender. Most closing statements on the buyers side indeed are ted by financing charges but the appraisal fee, physical inspection and any other inspections will be in there as well, and dont forget title insurance for the lender.
So all the frustration that you expressed about closing costs is well understood by me, but …. these fees are going to be there even if you do a FSBO.I ABSOLUTELY AGREE with you about compensation for realtors. I broke it down hourly and it is crazy. (See my previous long post) I will also heartily agree that the industry has made ridiculous amounts of money because of the run up in homes.
However there are those of us out there who do provide a very good service to consumers at a very low cost. You just have to look around.
Again, I was not offended by your post at all. I hear your frustration and agree with you.
ParticipantYou guys are all correct. Our MLS here in San Diego (and I assume all other MLS’s) enables us Realtors to set up automated email searches to send out to leads. We can setup the search anyway we want. Most of us will setup the search to capture new listings and ANY changes in a listing or listing status. Thus any time there is a change in status such as the price then that listing will get captured by the automated search and thus sent out to all of our leads. Even if the price change was not any literal change at all.
So yep it is all a game we play to get our listing more attention.ParticipantDiego –
I agree with the comments that are subsequent to your offer. Your commentary really lends itself to backing up stereotypes that have developed in our industry.
By putting CBB as one of the more important parameters in consideration of selling a home, you are reinforcing the old boy network.
Why should a buyers agent care what the CBB is? If a buyers agent is TRULY DOING HIS JOB which is finding a home for his client then HE SHOULD BE BLIND to the CBB.
Again, you seemed to be blind to what I stated in previous posts. That is pricing your home, visiting the competition that is local to you and making sure your home is more appealing and/or priced better then that local competition, and making sure your home has been made to look good, then you have positioned your home as well as you can.
Do you have hard stats for how many sales open houses generate?
Do you have hard stats for how many sales your brokers tours have generated?
Do you have hard stats for how many sales your marketing efforts have generated?
For my brokerage, 100% of my sales have been due to the MLS, Realtor.com, or drive bys. To justify 3% on each side of a real estate transaction for tools that are outdated and have not changed for 30 years is simply not fair.
As long as there are agents and realtors like yourself, my brokerage will continue to flourish.
ParticipantI to am addicted to this site as well.
Powayseller, I know you were addressing sdrealtor and not myself. I really hope you do not go as well. Your comments are very insiteful.
Forums like this are great for thoughtful expressions.
ParticipantI respectfully disagree
I think a more proper answer would be as follows:
Analyze the data in your area to see if your CBB is in line with your competition. Also look at the data to see if there is a clear trend that higher CBBs are selling faster then the average CBB.
If the data indicates this is so, then think about adjusting the CBB.
Don’t just do it based on a speculative statement.
ParticipantHi Solman –
I wanted to thank PS for her kind words about me. I also think that waiting hawk was quite inciteful. Right now most sellers are inclined to switch agents as a first option. This may or may not be the right move.
I would advise you as follows.
1 – Try to replay in your mind what services your listing agent said he would provide for you. Has he provided all of those services. These may be a certain number of open houses, tours, advertisements whatever.
2 – Has your agent kept you informed of the market in your area? Do you receive regular comps even after you listed your home? This would include updates when properties comparable to yours go into escrow, or drop off the market as expirations/cancelled/withdrawns.
3 – Has you agent advised you on the pricing of your home. When he took you listing did you both go over the market comp data together. Did you look at active listings, solds and pendings? Did you look at how many homes did not sell, again that were cancelled/expired/withdrawn.
4 – How did you arrive at what the cooperating commission should be? Did you again look at the hard data, what everyone else was offering?
5 – Did you go to look at the competition? That is did you actually go see the other comps that matched your home and walk through them? Because if you didn’t you can be sure that your potential buyers did. This again, would help you determine if your pricing should be north or south of the competition.
Anyways, those are just some tips. You may want to interview some other agents. HOWEVER no matter what they tell you MAKE SURE you ask them to back up any claims with hard data. ALWAYS ASK FOR HARD DATA. If you need clarification of what I mean by that just give a call…
If you want to contact me give a ring, 858 736 4778 or visit my site at http://www.1800grrealty.com. BTW I live off of Calle Cristobal so needless to say I am familiar with the area.
ParticipantI got a kick out of the post!!
Unfortunately I have not been on the site for a week or so…. Things have been super busy and I made a promise of more family time and a bit less work… including time off of the computer…
As for who am I, (SD Realtor) here are the essentials:
– licensed a bit over two years.
– own my own real estate brokerage as a second business
– 18 year career in electrical engineering (digital design and system architecture) (this is my primary career)
– currently renting a home but own a few rental properties cuz I don’t want to buy a larger home for my family right now
– wife, 2 kids, mom in law, 2 cats, 2 dogs, 2 turtles all live in the home we rent. HELP.
– would be classified by the industry as a discount broker although I do not agree with that classification.
– will freely admit that I wish I would have sold my rentals in 2004. oh well…I also find the posts from everyone here very educational and have to monitor my addiction to the site.
My company can be found at http://www.1800grrealty.com.
Anyways that is who I am.
ParticipantThe post was to juicy… don’t mean to piss other realtors off but….
I don’t want to generalize here but I have found my dealings with other Realtors fascinating. I have only been licensed a little over two years and the business I own is run by me as a second profession. It does okay and if I put more time into it I could probably live on it. I am sure that most brokers/agents would call me a discount brokerage because of the listing fee I charge which is WAY below the industry norm. The same holds true for buyers sides, my buyers enjoy large rebates from me.
I come from an engineering background and dealing with engineers all of my adult life has left me with expectations that peers in my professions are well educated. This is not the case in real estate. Frequently I am very frustrated with the lack of professionalism with other realtors in my field.
I feel that the main problem that people have with realtors is the justification of thier salaries. Now the bottom line here is that the vast majority of realtors make nowhere near what most people think they make. Your listing agent doesn’t get 3% of your homesale. He gets a fraction of that and there are many other fingers in that pie. However, we have all agreed that the cost of housing has gone up at least 100% in a short timeframe. So that implies that realtors are taking home 100% more then they used to.
Are they working harder now then they did a few years ago? If they are does it justify that salary increase?
I think not.
In engineering there have been YEARs where I averaged 50-60 hours a week. I feel that if you break down the hourly wage for a Realtor you would see that it is quite lucrative.
Hey I entered the biz because of many reasons, one of them being if I spent half the time in real estate as I do on my engineering projects I could make as much if not more money. Which so far has held true.
sdrealtor is correct in the statement that the profitability perception is DRAMATICALLY higher then it really is. I agree. HOWEVER, I contend that a well educated person can offer consumers VERY EFFECTIVE service in the real estate industry at a much lower commission IF that person can keep the overhead down. Understanding the rules, providing customer service, and being able to interpret the real estate market are part of the essentials here.
I owned a Help U Sell as my first foray into the market. It was successful but as a second business it was TO BUSY for me. So I scaled down and run my own little business and do just fine. My clients save a ton on commissions and are very thankful for my services and professionalism.
I have gone to MANY a listing appointment where the client asks if they would save money doing a FSBO. The answer is ABSOLUTELY YES! However do it right! Get an attorney who is familiar with California RE law and make sure you follow the process to the letter of the law. You will find that this will cost you approximately 1% of the sales price. Get an ad in the paper, call Jeff Karchin to put you on the MLS for 500 bucks and there you go.
Again, I agree with some of sdrealtors points, especially about if you were doing a FSBO and he bought the home off of you, that he could “sue the pants off of you”. Well yeah he probably could. However, again, I entered the industry for this because my analysis showed that there was alot of room for competition. Rather then fight against the traditionalists and do a Help U Sell or I Pay 1, I choose to lay low and fly under the radar…
BTW my sister in law works for Coldwell Banker. She like many other realtors holds Help U Sells and I Pay ones in contempt of the profession. There is this …bitterness that I hear from other realtors about these companies. I have no such angst. I think that if they are successful and provide quality of service then so be it. I have dealt with smart Realtors and idiot Realtors from full service and discount brokerages.
Again, I just have such a distaste with these sorts of terms. Where is the HARD DATA that shows open houses and brokers tours provide x percent of sales. They may, they may not. Where is the HARD DATA that shows an advertisement in the San Diego Union Homes section provides x percent of sales? When sales agents make the pitches at listing appointments that these two tools effectively justify the commission they should receive as opposed to a “discount” commission, all I ask is to show me the hard data.
I would advise that all sellers do the same.
I am not trying to disrespect Realtors. Really I am not. Being in the industry I ABSOLUTELY know the overhead costs and such. I also know the misconceptions the public has.
Still… I think that there is room to run a business in this industry, charge less in commissions and still be successful.
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