Kathy's Blog

Redfin Redux

Ryan Taylor Homes — Wed, 28 May 2008 05:56:36 -0500

By the way, I'm not picking on Redfin. If you Google "rebate" and "real estate" you get about 495,000 hits. There are a lot of firms and agents out there on the rebate bandwagon.

After my last post, I got a bunch of replies from supporters of rebate models. I would like to comment on these comments.

1. There is a common assumption that the sale price is driven by the commission. For example, if a seller is asking $100,000 and paying a three percent commission, the price would sort of be automatically reduced to, say, $98,000 if the commission were 1 percent instead. THIS IS NOT SO. I have never seen a seller use this "logic." The price is driven by the market, not the commission. Wouldn't it be nice if the price WERE driver by what the seller wants. A perfect world! No foreclosures, not short sales, no disappointment. Prices are driven by the market, not seller's desires OR commissions.

2. Someone said "as long as Redfin is profitable with 1 percent, they have a viable business." Sure. That's true. But my point is that there ENTIRE business model is based on an income stream THAT THEY DON'T CONTROL. When sellers start refusing to pay commissions that are going to be rebated to buyers, Redfin (and the other 494,000 rebaters out there) won't have an income stream.

3. Someone insisted that buyers pay commissions because they pay the money comes from them. Of course the seller gets the proceeds from the buyer. That's how sales work, you see. A buyer pays money for something and then it becomes his. Once the seller has the money, the seller can do whatever he wants with it. One thing he does is pay commissions. The buyer has no control over that. The buyer is not a party to the contract between the seller and listing agent. The buyer has no influence over commissions. THE BUYER DOES NOT PAY THE COMMISSION.

The myth that the buyer pays the commission was started by these rebaters as a way to snag business. It's just not true.

Consider this: If the seller refuses to pay the commission at the settlement table, can the buyer overturn that decision by saying, "Well, I'm really paying the commission so you can't do that"? No. Again, if the seller refuses to pay the commission, who sues? The listing agent sues the seller. Not the buyer. Why! BECAUSE THE SELLER IS THE ONE PAYING THE COMMISSION!!!!

If that doesn't work for you, just ask a FSBO who pays the commission.

Out to Get Redfin?

Ryan Taylor Homes — Tue, 27 May 2008 21:43:40 -0500

I was following a lively question and answer set on a Redfin forum when someone in the discussion (a Redfin representative?) accused other party (sounded like a consumer) of being "out to get Redfin." The consumer was arguing that Redfin's offer of "2 percent back" to the buyer is false advertising since Redfin's policy is to rebate the buyer 2/3 of the commission they receive, whatever it is.

While I sympathize with the consumer in this discussion, is it just me, or is the focus on the wrong issue? Doesn't anybody but me have a problem with the term "refund" being used to describe the seller's money being turned over to the buyer? It's NOT a refund, since it was never the buyer's money to begin with.

In case you need a refresher on just how this works, sellers pay a commission to a listing agent, who then offers part of the commission to agents inside or outside their firm who bring a buyer. This offer is intended to compensate a cooperating agent. It is paid by the seller. It is not paid by the buyer. For those of you who want to argue with me about that, just ask yourself who gets stuck with the shortfall in a foreclosure or a short sale. That, of course, would be the seller's side.

Poor Redfin! They've based an entire business model on a source of income over which they have no control. And the more vocal they are, the sooner sellers will refuse to offer commissions to buyer's agents if they are just going to give it away. Redfin SHOULD feel paranoid!

Recently, Redfin got its hand slapped over their "Sweet Digs" blog in Northern California. Their retort is that the traditional real estate model and the MLS are "evil forces" out to get them. The irony is that if Redfin succeeds in toppling the traditional model, there won't be any money to fund their own snazzy new business model. That traditional model is the basis for an offer of compensation by the listing firm to the selling firm. Mess with that and there goes your whole plan.

Got any other ideas, Redfin?

Would Buyers Pay Their Buyer Agent?

Ryan Taylor Homes — Wed, 26 Dec 2007 14:22:44 -0600

In a recent post, I brought up the issue of who should pay the buyer's agent. Most of the comments I received focused on two concepts:

1. Many of you commented that buyers, if faced with the possibility of having to use part of their funds to pay their own agent, would simply move onto another house.

2. Sellers should offer a HIGHER commission to buyer's agents to attract more buyers.

Can anyone prove either one of these through their own experience?

Recently, and for the first time in my own experience, I saw a commission on the buyer's side of the HUD-1. In this case, the buyer wanted the house and didn't mind to pay their own agent. They didn't just move on to the next house.

As for offering higher commmissions and bonuses, I have tried these strategies on my listings. While I get a lot of interest from agents hoping to bring a buyer, never has this strategy actually resulted in a sale.

And, in case you were thinking that no agent would show your listing if you didn't offer a commission to the buyer's agent, try to remember the last time a buyer asked you which houses they should see? In my case, that would have been several years ago.

Buyers come into office looking for a walking lockbox key and an unlimited taxi service. That is, if they come into the office at all. Often, they just want to meet at the property. On their lunch break. I like to think buyers are also looking for a skilled contract writer and negotiator, but I'm not at all sure they've thought of that.

If anyone has read the results of the survey by the California Association of Realtors that came out last summer focusing on Internet buyers, you might draw the conclusion that the role of the buyer agent is diminishing. Yes, it's good news that today's buyer is better educated, but that also means they're not looking for that education from us. Yes, it's good news that they spend less time in our cars touring homes, but that also means they got into the car already knowing what houses they wanted to see. They didn't ask us.

Who Should Pay the Buyer's Agent?

Ryan Taylor Homes — Wed, 26 Dec 2007 13:32:14 -0600

Recently an offer came in on one of my listings from an experienced, seasoned, competent, and well-regarded buyer's agent from a well-known, well-respected firm. As many offers are these days, the price was low, the closing cost credit was high, and the inspection contingencies were rigorous.

On this particular listing, the seller was offering a somewhat less than standard coop to the buyer agent. When the agent expressed shock and dismay about the amount we were offering, I decided on the spur of the moment to get into it. I asked "Who are you working for?" The reply came quickly and with some indignation, "Why, the buyer of course!"

And I just couldn't help myself. "Then why should the seller pay you anything? You probably have a contract with the buyer that says the buyer will pay for your services. If you are going to beat the seller up on price, concessions, and condition, why should they pay you at all? If you were getting sued, would you expect to pay your opponent's attorney as well as your own?"

However, the paradigm that assumes the buyer agent's fee comes from the seller is so ingrained in our belief system that this agent could not conceive of getting paid any other way. I'm sure that this belief applies to many, if not all, of us.

Now before you get all militant about what I've just said I want to point out that I have great respect for the buyer's agent. Having often been one myself, I think we do a good job and provide a valuable service. My only concern is how we get paid.

I've been around long enough to remember when buyer agency first became popular. Before that, we were taught that we all worked for the seller because that's who was paying us. That principle was taught in our pre-licensing class and reinforced in the training we received from our first brokers.

When we first started admitting that we were really representing the buyer when we worked as selling agents, the BIG question was how we would be paid. Most trainers told us that, of course, the buyers would pay us. And that's how our standard buyer agency agreement is written in Northern Virginia.

Somewhere along the way, we stopped asking the question. Now we avoid pointing out to buyers that they owe us our commissions based on the buyer agency agreement. The seller calmly pays us, very often without even questioning the logic in it.

I want to question this logic. Isn't it time buyers started asking how their agent could truly represent their interests when they are being paid by the other side? Isn't it time for sellers to start questioning what they are paying for when they agree to pay a coop?

Isn't it time we told our buyers the truth about who is supposed to pay us?

Sources of Business

Ryan Taylor Homes — Tue, 04 Sep 2007 06:54:27 -0500

I recently interviewed a fairly new agent who was looking to join my firm. I asked her "What are your sources of business?" She looked ocnfused. I rephrased, "Where do your clients come from?" She quickly smiled and proudly said they were all referrals. Both of them.

I remember when the "by referral only" movement started. Before that, most agents would understand the term "source of business." Most would have understood that there is more than one source of business. They might also have understood that different strategies work for different sources of business.

But today, most new agents have bought into, or exposed only to, the "by referral only" movement. However, most of them don't really know (A) how to use a SYSTEM to get referrals and (B) that it is hard work, From my perspective, most seem to think working by referral means occasionally calling up your friends and family and then waiting for the phone to ring.

It doesn't. Then these agents get discouraged and conclude that the real estate business is dead. Or their once-budding careers are dead. Or both. And they quit.

Some of them should quit. But there are also many promising sales people that just need training, a new paradigm, and some confidence.

If I were to make a list of sources of business in real estate, right away several promising ones come to mind. Any niche, FSBOs, Expired listings, Internet leads, neighborhoods, referrals, corporate relocations, investors, and, of course, referrals from a sphere of influence.

What sources of business do you use? And what systems do you use to market to them?

What's Your Image? Why Is That Important?

Ryan Taylor Homes — Thu, 03 May 2007 07:16:16 -0500

Often, new agents come to me asking about "image advertising." This is a term they've seen in marketing materials and theywonder about it. Is it important? How expensive is it? How do I go about it?

To answer the first question, "Yes, it is crucial!" Why? This might be a long answer to a short question:

There are a alot of Realtors out there. To the consumers, we are all indistinguisable at the outset. Surveys tell us that buyers run into at least 17 different Realtors before choosing the one they will work with.

A positive and memorable image helps to set us apart. It helps them to remember one of us and seek us out when it comes time to get serious about buying or selling a home.

How do we build that image?

First, you must be memorable, different.

It's important to remember that we all have an image whether we mean to or not. You can find out what it is if you know how people finish the sentence, "She is the one who ________________" or "He is the one with ______________."

The way we dress could be one component. Perhaps we have a memorable style of dress. I know of one Realtor who always wears a red bow tie. People remember that. Some Realtors have their pictures taken with their dogs, their horses, their kids. Some wear flambouyant clothes or hats. Whatever the style, if it is memorable, it will work.

Second, you must be consistent. You can't put on a bow tie one day and wear a golf shirt the next. You must always sport the feature that distinguishes you from others.

If you use a slogan, you must always use it in advertising and conversations.

Third, it must come naturally to you or be easy to fake. Since you're going to be using it all the time, it must not conflict with your basic, natural personality or style.

Fourth, don't worry if it is slightly corny. Corny is memorable.

Think of agents who are instantly recocogbizable through a slogan or a style. Who are you thinking of? What is it about their image that works?

What ideas do you have for building a personal image?

Turning an Internet Lead Into a Buyer: Part 2

Ryan Taylor Homes — Tue, 03 Apr 2007 10:40:13 -0500

In Part 2, Turning an Internet Lead Into a Buyer: Part 2, I differentiated between a true lead and a mere glimmer of hope. That is, a true lead is a consumer who asks for information that is not already on the web site and expects a reply in their email or by phone.

That means that when they get a response from you they will:

Be expecting it
Be glad to get it
Read it
Possibly respond to it
Maybe even save it

They won't consider it SPAM. That's the good news.

The bad news is that they might not be ready to get in your car and buy a house this weekend. But you will have planted a seed that, tended carefully and regularly, could grow into a transaction.

So what should your response include? First, give them the information they asked for, whatever it was. If they asked for details on a property, give them the details. If they asked for information about mortgages, give it to them. But give them what they asked for and ONLY what they asked for. Don't use your response as a way to market yourself. DO NOT tell them what great service you provide, how long you've been in the business, or how successful you are. They just don't care. Yet.

Remember, they asked for information. Anything else you say won't be interesting to them.

BUT! Start planting your brand in their minds. Use your picture, your logo, and/or a catchy ad phrase (Condo Queen, Stan the Real Estate Man, Cathy Cares, whatever).

And make sure your response includes at least one opportunity to ask for something more. By this I mean a link to an online request form, not a plea to call you. If they ask for something more, that gives you another chance to respond to them, another chance to plant your brand.

Remember, they won't remember your name or company at first. They won't remember the names or companies of ANY of the Realtors that respond to these requests. But, if you follow the advice given here, you might be able to start planting the seeds that will turn a simple lead into a buyer.

Next, I'll discuss drip email.

Turning an Internet Lead Into a Buyer: Part 2

Ryan Taylor Homes — Tue, 03 Apr 2007 06:34:03 -0500

In Part 1, Turning an Internet Lead Into a Buyer: Part 1, I raised the issue of what in the world to do with Internet leads once you got them. How do you turn them into buyers?

I proposed that a recent experience I had with moving companies as in Internet lead for moving might be similar. For a short while, I became an Internet lead. I noticed how I reacted to the responses I got and how the companies followed up with me. Can I learn from that? I think so. In this series of blogs, I share what I learned.

The subject of this blog is "What is an Internet Lead?"

Consumers who are potential leads go to the Internet looking for information related to buying or selling homes. It doesn't matter what kind of information they ask for. They just want information, and the fact that they want information tells us that they are in some stage of contemplating buying or selling a home.

Web sites that capture leads and send them to agents have various criteria for what consumer actions generate a lead. Sometimes the consumer just asks for information that is already on the web site, for example, property details. But, sometimes they ask for information that is NOT already on the web site. It makes a big difference which type of information they ask for.

If the information they want is already on the web site (for example, property details) and they have to put in personal information to get it, they are NOT a lead. They might be a glimmer of hope, but they aren't a lead. It's only if they request information that is not already on the web site that I would call them a lead. These consumers take an action that they KNOW if going to result in responses from real estate people, they expect the response, they might even WANT it.

That's a lead.

The first lesson in Internet leads is this: Unless they ask for information that is NOT already on the web site and EXPECT a response from someone, they are NOT A LEAD.

That doesn't mean you shouldn't respond to a "glimmer." Send them an email with an offer, any kind of offer related to real estate. Maybe they will respond to that and ask for more information. Then they meet the criteria for a lead: They asked you for something.

If they ARE a lead, give them the information they asked for. Give it to them promptly, but you don't have to trip over yourself getting to the computer or the phone. A few hours is OK. And only give them what they asked for. Please avoid the temptation to tell them how great you are or suggest they go look at houses, unless that is what they asked for.

Next time, I'll discuss what your response should include.

Turning an Internet Lead Into a Buyer: Part 1

Ryan Taylor Homes — Tue, 03 Apr 2007 01:21:41 -0500

I am constantly bombarded by offers from thousands (it seems like) companies offering to give me (for a fee) buyer and seller leads from the Internet. After all, we've had to accept that the Internet is where the buyers are, or where they start out at, and agents who get them during that "information gathering" stage will net a buyer down the road.

I'm convinced. So bring on the leads! Leads, leads, leads! Cheap leads and expensive leads. Hot and cold leads. We get leads upon top of leads from the Internet, but THEN what?

In my team, we quickly found out how to get leads. We had so many leads we didn't know what to do with them. That was the problem: We didn't know what to do with them. We still don't. Oh, we do SOME things, like drip email, calling if they give a phone, setting up property updates by email, but we're not sure which, if any of the things we do, are on target. It often seems like we're just taking stabs in the dark.....

I read a lot that real estate experts have to say about Internet leads. Most of the advice seems good. Anyway, how would I know? How do they really know? This is a new area and changing all the time.

But I had a recent experience that gave me some insight. I was thinking about moving. Just across town. Just a thought. I wondered how much it would cost, how long it would take, things like that. I got into an Internet site that sent my request for a quote out to multiple companies. I got numerous responses. I reacted to them. I got my information. I thought about it. I'm still thinking about it. I'm not ready to move, but I saved the quotes in a folder on my computer, and when I'm ready, I MIGHT contact one of them. Or, maybe not. Who knows?

I guess I'm an Internet buyer. Of moving services, sure. But I think there are some parallels between what I'm doing about my moving quote and house buyers looking on the Internet.

That's enough for now. Part 2 will explore deeper.

Turning an Internet Lead Into a Buyer: Part 2

If We Don't Sell Your House, We'll Buy It

Ryan Taylor Homes — Mon, 02 Apr 2007 09:24:19 -0500

If we don't sell your house, we'll buy it! No marketing pitch generates more phone calls curing a seller's market than that phrase. Even though most sellers are sophisticated enough to know that there HAS to be a catch, they will still want to get the details.

That's why guaranteed sale programs are one of the top marketing systems around. It makes the phone ring. It gets you a listing appointment with people who really WANT and possibly NEED to sell. These sellers usually aren't tire kickers. They need the service.

Besides that, you get a chance to prove to the seller how important it is to prepare the home for showing, to price it right, and to make it available for showing.

I'm a big believer! The only problem is that guaranteed sale programs are not readily available to the average Realtor.

Does anyone know of a program that would be available to the average agent (if their firm does not have such a program)?

Zeroing In: Finding the Right House

Ryan Taylor Homes — Sun, 01 Apr 2007 12:07:00 -0500

A recent post focused on a list of questions buyers should answer about their wants and needs related to a home before they begin looking. The writer mentioned the huge number of properties to choose from and the absolute necessity of narrowing down your criteria before you can possibly find a home to concentrate on.

I certainly agree with this very professional post. However, I want to add a bit of wisdom that I've discovered over the years.

Buyers cannot possibly come up with a final lists of wants and needs until they have seen a few homes. The process of evaulating homes in person, as opposed to printed descriptions (either Internet or on paper), uncovers feelings and issues that you just don't get to unless you actually see the home.

My process involves taking a list of wants and needs and finding homes that match that list for the first tour. Of course, I let the buyer no that NO home will have everything on their list. I coach them on this fact early and often. I tell them that the purpose, the only purpose, of the first tour is to shake down that list.

After the tour, we go back to the drawing board and draw up a new list, which is always more focused. (When I was a new agent doing this, I wasn't surprised when items were dropped from the list. But I was shocked when new items appeared.)

With the revised list, the second tour is more on target. Then there comes the day when they find the house with everything... but there will always be an "everything EXCEPT."

That's when the professional agent guides the buyer through the problem solving process of what they really HAVE to have as opposed to what they can live without. What they COULD add or remove as opposed to what will always be there. For example, if you want a walk-out basement and the house doesn't have one, you're probably not ever giong to get it. But if you want a fireplace, you could possibly add one later.

Buying a home is a process, and helping buyers decide what their true wants and needs are is a process, too.

Home Inspections: Getting Buyers and Sellers On the Same Page

Ryan Taylor Homes — Sun, 01 Apr 2007 11:31:30 -0500

It might be funny if it wasn't so risky: Buyers and sellers playing games with home inspection items.

Have you evern heard a buyer, when drafting a list of items to request of the seller on a home inspection addendum, say something like, "Let's give them a few things to say No to!"

Have you ever heard a seller say, when anticipating a home inspection say something like, "I'm leaving a few things unrepaired so the buyer will have something to ask for!"

WHAT! What kind of thinking makes either of these strategies seem like a good idea?

A long list of items presented to the seller for repair disgusts and appalls the seller. "These buyers are too demanding!" "I shouldn't have to fix all these things!" Plus, how is the seller and the listing agent to know which items are important to the purchaser and which are not. That particular buyer strategy keeps everyone guessing, lengthens the time to an agreement, and gets on the agents' nerves.

A long list of unrepaired items left intentionally by the seller makes the buyer think there is much more wrong with the house than there really is. It makes them rethink their deicison to purchaser.

I've said this before and I'll say it again! Don't play games with the home inspection. Buyers: If you see something wrong when you go through the house, ask for the repair in the contract. For the home inspection, concentrate on those items you couldn't have know about, or understood the significance of, for the home inspection repair request.

Let's all try to communicate honestly and out of real need rather than out of a sense of sport. Everything will go much smoother. I promise.

An Offer the Seller Can Say "Yes" To

Ryan Taylor Homes — Sun, 01 Apr 2007 10:31:26 -0500

These days, many buyers think they HAVE to offer less than the seller is asking. I'm not sure exactly why. Of course, buyers can't explain it.

Just a couple of years ago, buyers were regularly making offers much higher than the seller was asking. The human brain hasn't changed that much in the last couple of years. Why, now, are buyers outraged at the idea that a house might be worth what the seller is asking for it?

Is this another "Principle of the thing" response such as I mentioned in a previous post?

I can think of a couple of reasons:

1. Perhaps buyers, worried by media reports of a declining market, are trying to stay ahead of a downward price trend by locking in a lower than market price in order to create a hedge against future price deflation.

2. Buyers agents are not doing a good enough job with their own comparative market analysis to show purchasers what the true market value of the house really is.

I'm voting against number 1. That would require too much logical thinking and independent analysis.

I've got my money on number 2. Too many agents who got into the business during the past five or six years don't know how to do a good CMA, never having had to do one before. Therefore, they don't really know how to form a professional price opinion on a home. And, not knowing how to do it, they can't defend it to their clients.

The irony is that every low offer that is accepted lowers the bar for everyone and creates appraisal problems that will plague us for months to come.

Agents, maybe the house IS worth less than what the sellers are asking, but make sure you know how to determine that. If the seller's asking price is realistic, learn how to defend it to your buyers.

That's what being a professional real estate practioner is all about. It's about knowledge, skill, and negotiating.

If you don't know how to do a professional market analysis, ask your broker where you can get the training. Everybody benefits from an educated real estate agent. Educated agents make us all look better and help protect the public as well as the real estate market in general.

It's The Principle of the Thing

Ryan Taylor Homes — Sun, 01 Apr 2007 09:10:45 -0500

At least once in every transaction, someone on one side or the other ALWAYS uses that phrase.

The seller won't pay for a home warranty. "But, it's the principle of the thing." The buyer won't take the house "as is." The seller won't replace the worn out stove. The buyer insists on using a particular settlement firm.

Focusing on principles over minor details will not get you into your home of choice and it will not get you out of your current home and into your next one.

The right focus is on whether your prospective purchase will be a home you can afford in a nice location with acceptable purchase terms. As a seller, the right focus is whether the net from you current home will let you move onto your goal. Those are really the the only principles buyers and sellers should focus on.

Sometimes sellers and buyers really get into the whole wheeling and dealing aspect of the process. Buyers want to bid low, get big money in concessions, or get sellers to make big improvement to the home even though the propertie's condition is already reflected in the price. Sellers want to get picky over buyer requests even if they are legitimate.

In one recent negotiation, acceptance of the entire package came down to who was going to pay for the home warranty. Money wasn't the issue. The issue was squeezing a few dollars one way or the other so the winning side could think they had "won" something. My question to the client was, "Base your decision on whether this deal will let you move forward with your goal, not on whether you can feel like you won a round with the other side." Sometimes that kind of logic works, but sometimes the client plays the "It's the principle of the thing" card and negotiations fall apart over minor details.

Buyers and sellers should avoid getting "hard over" on minor details and focus on the finish line. How can we, as agents, help them see the benefit of that?

How Is The Market? It Moves!

Ryan Taylor Homes — Sun, 01 Apr 2007 09:04:42 -0500

Buyers and sellers are constantly asking me, "How is the market?" These day, the question is often more specific: "When will the market improve?"

I'm constantly amazed at the question. The real estate market, is, well, a market. It responds to the law of supply and demand just like any other market. Sometimes sellers have the advantage (in terms, pricing, timing, and so on) and sometimes buyers have the advantage, but houses always sell to someone at some time.

But even though the housing market IS a "market," it is fundamentally different from, say, the market for pork bellies, in that the commodity is the buyer's or seller's home. The impact of the sale of a house is dramatic in that people have to part with a great deal of money (as buyers) or agree to part with their home for a great deal of money (as sellers). They have to make a major life change. They have to move their lives and their families.

So, I guess what amazes me about the question is this: If you have to make a major change in your life, what does it matter how the market in general is? Isn't the question more personal, such as "what are my chances to finding the right home at an affordable price with acceptable terms?" Or, "Can I sell my home for enough money to achieve my goals for my next home?"

As a broker, I often hear reports from agents that both buyers and sellers are "waiting." Waiting for what? If they are truly waiting until they really need to make a move, it's my job to anticipate that and provide support services until they are really ready. But is they are simply waiting until the newspaper tell them that the market is right for them, whichever side they are on, they are going to be waiting for a very long time. And they may never really achieve their true goal which is to live in the place they want where they want.

What Are Buyers Looking For?

Ryan Taylor Homes — Sun, 01 Apr 2007 07:45:29 -0500

I recently spoke to a prospective buyer who came to me through in Internet lead. In discussing what he had done so far in his home search, I realized that he had been not only shopping for a home, he had been shopping for an agent as well, even though he probably didn't realize it.

His history included surfing the Internet and taking actions that would send a lead to an agent, calling listing agents on newspaper ads, and calling on signs. In addition, he had several agents on the lookout for properties in various communities, one agent to a community.

The net result was that he had a lot of feelers out, but no single agent who could coordinate all his requirements and take into consideration his desires for location, price, and amenities. In short, he hadn't gotten very far and, even after months of inquiries, was still not very close to the confidence a buyer needs to make an offer and fell good about it.

I explained that all agents in our area have the same access to homes and information about homes. I suggested that by hiring an agent to work exclusively for him, he could get an agent that would take over the search tasks that he had been trying to handle alone and coordinate his search in a way that would make his search more efficient and more fulfilling.

Still, he was resistant. He didn't want to disappoint any of the agents he had working for him.

What was he waiting for?

My guess is that he will probably just wear himself out and make an offer on a home without really being sure that it's the ONE.

Is there a magic word or phrase that would explain to this buyer, and others like him, why hiring his own buyer's agent will help him achieve his goal more efficiently and more confidently?

Internet buyers interact with as many as 20 agents during their home search. They will probably choose one of them. Which one? What makes a buyer settle on one agent? Any comment?

What Are Agents Looking For?

Ryan Taylor Homes — Sat, 31 Mar 2007 19:56:17 -0500

As the managing broker for a real estate firm, I am constantly trying to develop services and support that will satisfy my current associates and attract new associates.

Recently, I have heard through the grapevine that agents are leaving their companies because of the slow market in our area. I wonder why?

For example, we have national advertising, Interent lead generation and management, a design/marketing center, in-house continuing ed and other training, satellite training, coaching and mentoring programs, online forms, prompt commission payment, low fees, an web-based "office" so agents can get forms, faxes, and other information anywhere they have a connection to the Internet.

I know all of these things are useful. I also know most good companies have systems similar to ours. Yet I've heard that agents are leaving firms left and right because of the slow market. I wonder why? If you are with a reputable firm with good services, why wouldn't you make better use of the services offered by your current company instead of switching? The new firm probably has the same stuff, or maybe even less?

Is it a "grass is always greener" scenario. Did a good recruiter catch you at a vulnerable time? I'm curious.

To my Active Rain colleagues who have switched firms in the last few months, I'd like to ask you why? What started your thinking to switch? What happened, or what was said or done, to finalize you decision? Then, how is your new firm different from you previous one?

Last, are you happy with the deicison you made? If so, why? If not, why not?

Does a Buyer's Agent Require Selling Skills

Ryan Taylor Homes — Sat, 31 Mar 2007 19:44:15 -0500

In a recent meeting of about 15 Realtors from various firms, the issue was raised about whether working with buyers required any selling skills. In other words, is the Buyer's Agent a sales person or not?

On the NOT side, the advocates pointed out that the hard sale practices would not work with buyers, as they have plenty to time to rethink a decision they made hastily and under pressure. Some ANTI-SALES people also pointed out that service, not selling skills, is what defines the buyer's agent. In short, about half of this group of real estate pros denied that buyer's agent need any selling skills at all.

On the other hand, they pointed out that listing agents require great selling skills in order to sell their services.

I was surprised by this debate.

For starters, no agent, whether acting for the buyer or the seller, can pressure anyone to do something they don't want to do. If they don't want to buy, they won't buy. If they don't need to sell, they won't sell. It doesn't matter how good we are at selling or what kind of arguments we make, we CAN'T MAKE A CLIENT buy or sell unless they want to.

But we ARE salespeople. Our sales skills let us guide the client in making wise and timely choices all along the process, whether they are buyers or sellers.

Just think how often sales skills come into play when working with buyers: Explaining the process to remove as much confusion as possible helps make getting to a decision easier. Choosing judiciously in what we show them is a sales skill. Using our knowledge to explain the differences between homes and the implications for the client is selling. Helping buyers narrow down their choices until the right home reveals itself. Closing and getting them to sign is sales.

Or at least that's what I've always thought.

Comments?

Limited Service Agency

Ryan Taylor Homes — Tue, 27 Feb 2007 01:16:12 -0600

This coming July, a new revision to the agency law goes into effect in Virginia. This revision sanctions the "limited service agent." Up until now, Virgnia agents could work as "standard" agents or as "independent contractors." No distinction was made regarding the types of services expected of an agent based on his or her title.

Come July, agents will have to let their clients know just exactly what services they will be performing and get their agreement in writing. Sme folks object to this change. They say that Virginia is sanctioning discount brokers when they should instead be setting a minimum standard for what all licensees should provide.

However, I think the new law could be a very positive thing for our industry.

For starters, "full service broker" and "discount broker" have not always been opposite terms. Many agents offer full services for discounted fees. How many of us have taken a deep discount on our fee and then worked our fingers to the bone for a picky client? We never went through the process of explaining that you get what you pay for and getting the client to agree.

Now that the full list of what services we provide is itemized in black and white, some agents will see that their fees are worth it and stop giving deep discounts. Maybe clients who are considering hiring a discount broker will see the value in a to themselves of paying a full commission.

Whatever the effect, there is never any harm in full disclosure. I'm ready. Except I don't have a form for it.

Has anyone seen or heard of a form for this new disclosure/agreement? If so, I'd love to know about it.

Auctions: An Introduction

Ryan Taylor Homes — Wed, 10 Jan 2007 11:27:42 -0600

Now that we have entered a strong buyers market, we are returning to marketing techniques we haven't seen in quite a few years in an effort to get our listings sold.

We're beginning to see Broker's Opens, bonuses, seller financing, and other techniques. Another creative marketing technique is the auction. You will definitely want to look into an auction if your listing simply isn't getting many showings.

The best thing about the auction is its ability to expose your listing to a large number of people in a short period of time. Even if your seller doesn't have much equity, I would still look into an auction.

Here are some basic facts:

There are three types of auctions: The Absolute Auction (no minimum bid), the Minimum Bid Auction (minimum bid set by the auction company), and the Reserve Auction (seller reserves the right to accept or reject the bidder's offer).

The Minimum Bid Auction is the most popular. It removes most of the risk for the seller. The Absolute Auction is the most powerful and generates the most interest, but is probably too risky for most sellers.

The auction can have three different outcomes: 1. Sale on day of auction (50% of the time), 2. Pre-auction offer (40% of them time), or 3. No sale on auction day. If #3 happens, the auction company does post-auction marketing at no additional charge.

Here is a thumbnail sketch of likely costs: The seller pays an up-front, non-refundable marketing fee set by the auction company. For a property in the $300,000 to $400,000 range, the fee might be about $1,800. This covers all the marketing by the auction company and the auction itself. The auction agreement temporarily supersedes the listing agreement, but the listing agent is written into the auction agreement. The agent is paid a commission based on a percentage. If the eventual buyer has their own agent, the buyer's agent also gets a commission based on a percentage. There is no possibility of getting both sides. The property continues to be listed in the MLS and the lockbox stays on. The price listed in the MLS is the minimum bid and details about the auction are given in the remarks. The property is sold "as is." There is no possibility of the seller having to pay the buyer's closing costs. The road to settlement is as usual. The buyer pays a premium out of which our commissions are paid (usually 10%).

So, the seller pays nothing but the initial marketing fee.

There are numerous auction vendors. One such company is Homeland Auctions. Here is a link to their site:

http://www.homelandauctions.us/

Getting Ready To Work: Training For New Agents

Ryan Taylor Homes — Wed, 10 Jan 2007 03:48:08 -0600

Pre-licensing courses required by most states don't really prepare agents for "life on the streets." Most new agents I've met (including myself), begin their careers without an practical knowledge of how to do their jobs. It's easy for them to feel "lost" and fearful that they may do or say something improper.

Broker training courses can fill the gap, but not all companies offer a systematic approach to training geared toward ensuring that new agents have the skills and knowledge they need to serve the public and stay out of trouble.

To compound the problem, many new agents don't know what training they should be getting. I remember just wanting someone to show me how to fill out the forms. Beyond that, I didn't have a clue what to sign up for even though there were literally dozens of courses to choose from.

Here, then, is my list of the most important topics to cover in those first couple of weeks. I've also included links to web resources new agents can use if an appropriate course is not available right away.

1. Code of Ethics

NAR offers a wonderful online course for new agents:

http://www.realtor.org/mempolweb.nsf/pages/newmemberorientationcourse

2. Agency law (in your state) and how to fill out the forms

Here is a great overview from Wikipedia. For your state, consult your State Code.

http://en.wikipedia.org/wiki/Real_estate_broker

3. Fair Housing laws (federal, state, and local)

http://www.fairhousinglaw.org/fair_housing_laws/laws/

4. Federal lead-based paint laws and how to comply

Here is a link to a great brochure from NAR that gives you a summary of the law and how to comply.

http://www.nvar.com/standards/leadbroch.pdf

5. Sales contract

Have an experienced agent, a mentor, or your broker write up two or three scenarios and create an offer for each scenario. Each scenario should include a particular listing, a description of the buyer(s), a summary of their financial situation, their goals in terms of timing, closing costs, and so on. Write up an offer for each scenario and have the experienced agents, mentor, or broker go over each one with you, pointing out what you did right, what you missed, and how you could improve in a real-life situation.

Getting training in real estate should be a career-long endeavor for agents. There are hundreds of topics, but these topics are, I believe, absolutely a MUST for new agents in their first few weeks on the job.

Code of Ethics 2007

Ryan Taylor Homes — Mon, 08 Jan 2007 09:12:45 -0600

The revisions to the Code of Ethics for 2007 have been released. Upon reading the revised Code, I was struck once again by the poetry of the Preamble.

Please take a moment to re-read it and quietly regard our awesome responsibility to the public and the honor of providing service.

"Under all is the land. Upon its wise utilization and widely allocated ownership depend the survival and growth of free institutions and of our civilization. REALTORS^® should recognize that the interests of the nation and its citizens require the highest and best use of the land and the widest distribution of land ownership. They require the creation of adequate housing, the building of functioning cities, the development of productive industries and farms, and the preservation of a healthful environment.

Such interests impose obligations beyond those of ordinary commerce. They impose grave social responsibility and a patriotic duty to which REALTORS^® should dedicate themselves, and for which they should be diligent in preparing themselves. REALTORS^®, therefore, are zealous to maintain and improve the standards of their calling and share with their fellow REALTORS^® a common responsibility for its integrity and honor..."

Just as we are diligent in our personal dealings with the public and fellow Realtors, let's also be diligent in holding our colleagues to the same standards. If you feel another Realtor has violated this important Code, please do what you can to report unethical dealings to the appropriate person at NVAR.

Unethical dealings by our colleagues make us all look bad. Let's do our part to build and maintain a public perception of excellence for our profession.

Do Sellers Have Smellers?

Ryan Taylor Homes — Mon, 08 Jan 2007 06:19:08 -0600

Early in my real estate career, I read an article titled "If You Can Smell It, You Can't Sell It." I don't remember the author, the publication, or even many of the details, but the catchy title has always stuck with me.

It has stuck with me because it's catchy, but also because I am confronted by the challenge of talking to sellers about potentially offensive odors in their homes in almost every listing.

Pet odors are the most frequent odor problems, but lingering smoking and cooking odors also present their fair share of challenge.

Now, it's really not that hard for me to talk to people about the smoking odors. People are used to getting beaten up about smoking. Everyone knows smoking is bad for you and offensive to other people. Plus, once they get the odor cleaned up (I won't even go into THAT in this post), they can just go outside to light up.

But to tell someone that Mr. Sloppy and his smell might offend someone! Or that not everyone likes sauerkraut, fish, or whatever! People take these things personally! Add to that the fact that most people can't smell their own house, and, well, I've never found a solution.

How do you introduce the issue of odor with sellers. How do you make them aware that the odor needs to go without having them "shoot the messenger"?

I'd love loads of feedback on this. The problem of smell really stinks!

The Ethics of Real Estate By Internet: The 2007 Code

Ryan Taylor Homes — Thu, 04 Jan 2007 12:57:50 -0600

The National Association of Realtors has adopted several brand new Standards of Practice for the 2007 Code of Ethics that directly address "doing the right thing" when using the Internet in the practice of real estate.

Here is a quick summary in plain English:

Don't mislead the client when using the Internet to establish a contractual relationship.
Make sure the information you put on the Internet is current, and, if it is not, take immediate steps to correct it.
Clearly disclose the name of the firm and the state of licensure on all web pages.
If you intend to share or sell the consumer's information you must clearly disclose this fact.
Don't say misleading or negative things about another real estate firm. This includes retransmitting or repeating things said by others.
Don't try to pass of content developed by others as your own.
Don't use any device possible on the Internet (keywords, metatags, and so on) to mislead consumers.

The NAR's attention to these issues is evidence of power of the Internet. If I engage in "door knocking" as a form of marketing, who I am, what I look like, and how I present myself is pretty evident. Because anyone can make anything look like anything else via the Internet, we now have the strong possibility that unethical individuals will use the medium to mislead, hoodwink, or otherwise mistreat and mislead consumers.

It is sad that ethical behavior via the Internet had to be spelled out so clearly. For the record, my name is Kathy Vaughan. I have been a Realtor for fourteen years. I live and work in Fairfax County, Virginia. My market is the Washington, D.C. metropolitan area. I am the broker/owner of a RE/MAX firm. I list and sell real estate in addition to managing a number of sales associates. I use the Internet to:

Market my services and those of my firm, CitySide Properties, Inc. (doing buseinss as RE/MAX CitySide)
Advertise listings
Provide an Intranet (including forms, faxes, and legal information) for my sales associates
Communicate by email with prospects, clients, family, and friends.
Get training and information
Recruit new agents
Write and respond to blogs on Active Rain
Other stuff as needed

I was once tempted to hide the fact that my real estate company was behind a particular marketing effort but decided against it because, I reasoned, the very fact that I was tempted was probably a pretty good reason not to do it.

The NAR had not adopted the new Standards of Practice yet, but I didn't need that to stop me. I've always believed that operating in the open was the best way to stay out of trouble. Again, it is sad that ethical behavior via the Internet had to be spelled out so clearly for Realtors. I only hope that the new standards encourage my fellow Realtors to behave the way they should have behaved before the standards were adopted.

Feedback On "Calling For Feedback"

Ryan Taylor Homes — Thu, 04 Jan 2007 06:15:15 -0600

I am amazed by the feedback I have gotten on my blog about calling for feedback. It illustrates a point I forgot to mention in my post: If you put something out there that interests people, you will get feedback whether or not you ask for it.

A few of the responses agreed with me that I can give my sellers feedback after showing without talking to the agent. That is, "We didn't get an offer. So they didn't want to buy it."

Feedback (on my post) ranges from "feedback is useless" to a firestorm of controvery between my readers over email vs. calling and whether or not using feedback is hiding behind a different "messenger."

Here, then, is my feedback on my feedback:

Showing services and email feedback are easier for the listing agent but HARDER for the buyer's agent. They have nothing to go on but an address and a date. How can they be expected to remember enough to give useful feedback? (Remember my blog on Helping Buyers Make a Decision? I don't even want to remember the ones they DIDN'T like! I don't know about your market, but, in my market, there are just too many homes on the market to worry about the ones that didnt make the cut.

You never get a second chance to make a good first impression. Calls like "What if they changed the carpet?" or "Did you know they are willing to paint the kitchen?" won't bring them back. Sorry.

So there is my feedback on your feedback. Isn't this ironic?