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sdrealtor
ParticipantThe real money in this boom was made by the loan officers and thats where you should look for collateral damage. The just arent that many realtors making $75,000 or more. The construction industry is dominated by unskilled and semi-skilled laborers many of which are not legal immigrants counted in those figures.
In the RE community there is a big thought that you need to create the perception of flash and success. The truth is most of those cars are leased and the clothes are from Marshalls.
ParticipantSD R,
Good thread though I doubt it matters much to others on the board or sinks in. The public does not care that we dont get compensated for 80% of our time. They don’t want to pay for that, they only want to pay for what they actually use without realizing that they have likely been users of that 80% of uncompensated time for other agents.The system is what it is because it works better than other alternatives. It is a very expensive system to maintain and has created a relatively efficient marketplace. Were it not for this efficient marketplace, homes would be less expensive and far more illiquid. Many on this board would applaud that….until it came time to sell their home. Then they would want top dollar just like every other “greedy seller” they criticize and they should be glad the system exists as it does.
Is there room for improvement? You wont get any arguement here. But it’s not as simple as throwing a bunch of information on the Internet.
Take care and best regards
sdr
ParticipantMy wife has taken the trip up to the Mission in San Juan capistrano and there is a great petting zoo there if you have little one’s.
ParticipantSD R
I’m glad you weighed in here and absolutely agree with you that it can be operated at some level of discounting also but as a niche business. I think the fact that you operate it as a second business while your wife works and also has a second business speak volumes as to the profitability of this industry. I’ve seen your transactions on the MLS and have no doubt you are doing a great job for your clients dare I say probably on par with the top agents out their (service wise not productionwise). My point is that if this was your sole source of income on a full time basis it would be difficult to do a good job for your family. If you did it full time, the volume you would need to support your family would likely exceed your ability to deliver the same level of service. Your family woudl grow frustrated by your absence at nights and on weekends. As a part timer it is easier to preserve your time as your own. I also don’t think there are enough electrical engineers that got tired of paying to buy/sell rental properties to support this industry. Being in this business requires an entrepreneurila slant which you have but most people dont.A couple of points on Ipayone. You are correct that it was never constructed for Real Estate. I went to one of their first recruiting meetings and met the CEO/Founder. What I heard come out of his mouth was exactly the same words that I heard come out of the mouths of dot com/tech start-up companies. He in fact came from a failed tech company. It was clear to me from day 1 that his intention was to build something of adequate size that he could sell off to one of the major players in the industry.
As for spending big bucks on advertising I do not believe that was the case. Two of the biggest investors in Ipayone were Hahn (owner of Sports Arena) and Lynch (owner of 1090). The advertising was no doubt provided by them as their investment into the company. My guess is that the naming provided a great write off for Hahn and that the ad spots on 1090 were whatever was unsold inventory (and thus no cost to Lynch).
ParticipantNo question that commssions have essentially doubled but the number of individuals chasing has also doubled. I know, I know…thats no excuse and why should you care but unless quality people in this business can earn a good living you won’t have quality people in this business. A good commissioned sales person is worth $100,000 easily in any industry particularly one handling transactions of this magnitude. Given the current structure that makes us all independent contractors that translates to earning about $150,000 in net commissions to be comparable to a sales person employed by a corporation. I can tell you without question that far less than 10% of agents earn this. Now that sales volume is down there will be an inevitable shake out among our ranks.
The bubble in RE agents means that per agent earnings havent changed all that much on average. With longer selling times, marketing costs rise and the risk of not getting paid (i.e. selling your listings) increases. There is definitely room for some improvment in selling costs for consumers but there is only so much volume an agent can handle before the quality of service falls below a level I would not accept. I’m sure there will eventually be a better model but my belief is it wont happen anytime soon so you are left with 3 options: accept the current system, try to beat the system on your own or don’t participate.
ParticipantIpayone wasnt too early or too late. There have been many iterations of the same concept and will be many more. Some level of discounting is possible but the bottom line is that there isnt as much money to be made in RE brokerage as you think. You can leverage all the technology in the world but you will never replace all the hand holding, negotiating through difficult personalities, investigating issues with properties and much more. It’s an expensive business because every deal is essentially a custom product rather than an assembly line industry.
ParticipantThe article is a classic.
“Its a shame but we just ran out money.”
“Everything was fine when it was a seller’s market.”
Unfortunately they left out this part
“and houses sold them selves so we could get paid for doing nothing. But now that we actually have to figure out how to get a house prepared for the market, properly priced and marketed as well as escorted through escrow well we just dont have a frickin clue how to do that!”
ParticipantHere’s the orginal thread!
April 5, 2007 at 1:44 PM in reply to: Some facts/observations about Servicing, Loss Mitigation, Foreclosure, etc. #49329ParticipantGreat info DLJ that I’ve not seen elsewhere. Glad you are aboard the s.s.piggington.
ParticipantFunny, I just figured he was a young highly motivated go getter. I never even considered nor cared to consider what race or ethnicity he might be.
Oh well, color me a liberal.
ParticipantCB,
Its a great ride (the coaster train that is) and I believe kids are free on the weekends. Take a trip to old town and have lunch with your kids. Its a great way to spend a couple hours.
sdrParticipantThe funny thing is he wouldn’t even have had to list it. It would have been a one party show to someone that just inherited a boatload from parents in RSF and was paying cash. He is too concerned with the price and saving money to see the reality of what is most important which as we know is his walkaway money.
ParticipantSD R,
Your client stopped by this board while you were on vacation so I know the unit. It’s a nice one. I shared with him that out of 34 units sold in his area in 2006 at least 2/3rd were subprime financing with little or no down and that he should screw not around if he gets a decent offer from a solid buyer. I hope he got one.I also know the FSBO neighbor who has a very shaky income situation. I meet him at an open house a couple years ago and about 18 months ago I tried to help him sell it. He would have had to pay me to represent him (2.5%) and the buyers agent (2.5%) but the price would have been about $515,000 before he invested any of the money he did for granite, travertine etc on remodelling. He was convinced he could do it himself and save 2% (about $10,000). He probably has one of if not the best location in the complex but a year later he is languishing on the market completely overpriced. If he had listened to me he would be well on his way with at least $20,000 more than he will end up with as well as getting out from heavy mortgage payments. Don’t sweat it! Some people create their own problems.
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