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sdrealtor
ParticipantJES
Hang in there! You can get a decent 4BR/2.5BA home in a nice part of Encinitas for about 700K right now. Soon it will be less.ParticipantLOL, talk about backhanded compliments. To clarify, there are VERY VERY FEW 3% guys. The discount brokers talk about the savings over 6% listings which are virtually non-existent in the marketplace and I find that very deceptive. They should be comparing themselves to what is really going on in the market TODAY (Most full service agents, charge 4 to 5% today) not what was going on 3+ years ago. Full service guys aren’t threatened by 1% guys because their business model wont work in the long run on a large scale. Personally, I dont like working with them because every time I have, they disappear as soon as we go into escrow and I end up doing their job for them. Conducting a RE transaction properly requires a huge amount of communication and coordination. I would estimate that I speak with a seller by phone an average of at least once a day during the transaction. With todays sales taking over 100 days, that is 100+ phone conversations with the seller and at least another 100 calls with everyone else.
Sure there will be some success stories but I have seen many reports and market share among full service brokers is increasing over the last few months. In my area, several of the flat fee brokers have disappeared, are looking to sell their business or already have turned over a couple times to a greater fool.
BTW, The 3% model has already gone the way of the buggy whip since around early 2004.
ParticipantSD ,
Personally I believe you will be around if you choose to be. It sounds like you are bright and ethical which is refreshing. Many of our counterparts are not as we know. When someone asks me about FSBO, my response is always to Go for it if you feel up to it. I explain that the reason RE prices are what they are is due to a relatively efficient market place built and supported by realtors. There are opportunities to “beat the system” and those with the gusto to try are welcomed to. Currently, I also add that the market is much tougher so beating the system is tougher but there will always be successful FSBO’s and you might be one. If someone wants me for my merits so be it, if they know of someone better or a better way I suggest they go that path instead. The bottom line is hiring someone whom you believe will represent your best interests.The full service brokerages will be far more able to withstand this downturn for many reasons but of course there will be survivors elsewhere. I hope you are one because you sound like a good guy and there should always be room in this industry for people like you.
BTW, IPAYONE won’t be. The founder is a crook only interested in building a company he can sell not building anything sustainable. I went to one of his seminars to hear his pitch. I heard the same pitch many times in the late 90’s in the tech industry.
Personally I prefer the security of having deep pockets behind me in this gig. I know many long time agents that have seen alot of ugliness between clients in downturns. I choose to try my best to insulate myself from those risks both in how I practice and where I practice.
Enough of this topic, there are bigger fish to fry!
ParticipantSupply and demand at work. Single levels are far more rare and those that need them, really need them. The aging of the boomers will certainly continue to drive this.
ParticipantSD ,
Its a blog and thats they way these things go. I always shot from the hip and try not to sugar coat anything. I’m not here shilling for clients so my intentions are pure. It doesnt bother me to be in a profession that many hold in contempt. What others do is outside my control and there are crooks in every business. I sleep well knowing that I always try to put my clients interests first and believe (as you probably do also) that the rest will take care of itself. I am annoyed by the incompetence of many in our profession but most of those are short timers and should be out of or hair soon. If you are not providing real value to clients you shouldnt be in this business. I think we can both agree with that.***********
Lots has changed in this industry. Talk to someone whose been around for 20 years to hear about the mls books, the contracts that protected no one and the lack of disclosures. The industry isnt perfect, far from it, but there are quality people in this business (I know many) who do a great job for their clients. While the compensation/sale has grown substantially, the number of people chasing the sales has grown at a much more rapid pace. Many of them deliver no value to their clients. If the volume was there, quality agents would be willing to work for less, but the current state of the industry make it difficult if not impossible for them to survive.
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I believe a quality agent is worth more and believe I earn my money. I have clients with RE licenses that could represent themselves but chose to pay for what they believe is better representation. To me that says alot. Furthermore, this business does not work at 1% unless you are a niche player exploiting a niche. Many of the top brokerages in the county with the best agents are struggling to survive with 2.5%. The creme of the crop are barely eaking out a profit. If I damage my client and disapear from the business there is someone to hold accountable. If you do the same your clients will be left on their own.ParticipantIn a rising market no one worries about the little things. In a falling market, everyone will be looking for someone to blame besides themselves. Every market downturn has been accompanied by the disapearance of the small/discount players in RE because there business models dont work when it gets tougher. We know what the real margins are in RE and it aint nearly as pretty as what the general public thinks.
As for the legal defense you are correct. I have a family to support and a fairly significant net worth to protect. It’s not a risk i’m willing to assume. You must be less risk averse than me.
ParticipantMy guess is that this board is heavily weighted toward people working in hi tech/engineering. I know alot of people that make alot of money and few are engineers. We need to remember that not everyone in SD with a good job works in these fields.
ParticipantSD ,
We pretty much are in agreement then on most areas. However, we both know that it is impossible to quantify with hard data how much extra value those marketing tools provide. To the client whose property it makes a difference on its well worth it, to others it isnt. We just dont know.We all know it’s getting harder and harder to sell. Last week, I saw 3 deals get put together between agents in my office before hitting the MLS. Those clients would all attest to the value provided by their agents. Two years ago all you needed was a cardboard sign in the lawn to sell and you probably couldnt even drive the stake in the ground before a few offers rolled in. I think we all agree that adddional marketing makes a difference, the question is how much? When you are carrying a dozen listings for 6 months that arent selling and your clients ask what are doing to get their property sold, you need to tell them something and have shown them something otherwise you are an overpriced Jeff Karchin service.
Also, when prices were rising the buyers of your listings didnt complain when an undisclosed roof leak reared its ugly head in the first winter rain because they had already made $50K in appreciation. When they are losing money due to falling values, they will look to sue everyone particularly the listing agent. I hope it’s not you or me for that matter, but at least I have a strong team behind me to stand in defense.
ParticipantI agree with most of what you say and never said you provide substandard service which I’m confident you don’t. What you provide is limited service. I provide full service. For example, this Winter I had a client who needed to get their home ready for sale. They figured it would take a month. In 5 days, I had a large home painted, re-carpeted, plumbing issues addressed, electrical issues addressed, landscaping improved and had the home staged. My clients saved about $3K to $4K by using my contractors (many at direct wholesale rates). Their house went on the market, priced right and sold quickly, before the market got even worse. I believe it made between $25K and $50K difference getting their house on when they did. This is but one example of how realtors can earn their pay.
BTW, I charge 2.5% for full service on my side and invest heavily in my listings for things I believe will directly lead to the sale of their home. I hate spending money on things that have ZERO ROI and tell my clients so.
ParticipantI hate to state the obvious but SD Realtor, apparently you don’t do open houses, broker tours or advertise your listings so it makes perfect sense that 100% of your sales result from the only tools you use. I wouldn’t argue that the MLS is by far the most important, followed by Realtor.com. However, I have sold several homes the last few years due to Open Houses, Broker Tours and Advertising. The truth is we don’t know where the buyer will come from so the more you do to expose a home to the potential market, the more opportunities you have to create a sale for your client rather than simply waiting for one. As for the 3%, no argument here.
As an aside and with no disrespect intended I work full time to sell RE and devote all my energies to it. You work P/T and are able to exploit a niche. After two years during perhaps the best market in history, you probably arent qualified to have all the answers to fix the system. I’m not either. If I were you, I’d be happy exploiting the opportunites you have. If the big boys ever adopted your model, there would be no more niche for you to exploit.
ParticipantSo basically out of the top employers comprising over 250,000, there are roughly 10,000 jobs (QCOM+SAIC)that “could” leave the area while the rest are pretty much anchored here.
ParticipantShe is way overstating things. It really only takes several hundred. But prices change in dollars not percentages. Sellers dont say lets drop the price 10%, they say lets drop the price $10K or $25K or $50K. Percentages are simply a way of analyzing things.
ParticipantTwo words…..Wealth Transfer
ParticipantWell UCSD isnt going anywhere and is a public institution like the government and health care systems so you can throw those out of the mix because they will always be here. So that’s 2, certainly not alot for a metropolitan area like this which is exactly my point. Does the SD economy does hinge on major corporate employers?
BTW, large employers bring lots of jobs but not always high paying jobs. Small employers don’t bring lots of jobs on their own but often bring high paying jobs. Several years ago I worked at a start up company which peaked at 25 employees. More than half made 6 figures and several of us made over $200K before we sold the company and cashed out. One of the things SD has going for it is that there arent many large employers that could single handedly bring our economy to a halt.
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