Sean's Blog

Top 10 reasons why it’s a good time to receive a commission advance

Sean Whaling (eCommission) — Thu, 08 May 2008 11:53:05 -0500

#10 Your buyers have a mortgage commitment showing proof of income, tax returns, pay stubs, letters of employment, 20% down, a 780 fico score, drug test, DNA sample and assignment of first born…good to go.

#9 One of your 73 listings just got a cash offer – at full asking price!

#8 You’ve run out of “price reduced” signs and have decided to buy reprints saying “new price.”

#7 Because waiting months to receive your commission check after already waiting months to get a deal into escrow is legally considered cruel and unusual punishment.

#6 It’s time to pay your taxes (or so the IRS letter said…)

#5 Better odds than a scratch and win…

#4 Your Broker took down the ATM sign from above his office door.

#3 You persuaded a Bank Underwriter to say “yes” to your deal by convincing them REO stood for “really exceptional offer.”

#2 Because you’re too polite to tell your buyers the “open house tour” you just took them on cost you $900 in gas.

#1 … reason why it’s a good time to receive a commission advance: You’ve earned it!

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eCommission Blog

Postive Signs Ahead in the Real Estate Market

Sean Whaling (eCommission) — Mon, 05 May 2008 11:14:25 -0500

I’ve started hearing better news from customers lately and thought I would share it with everyone. We have a unique perspective on the housing market at eCommission because we talk to agents from all over the United States everyday.

For what seems like an eternity, most of the stories we heard were negative about banks not honoring commitments, agents struggling financially and unfortunately many deciding to get out of real estate. Well, the news is starting to get better! We have more agents telling us they’re seeing buyer activity in the worst hit markets like California, Arizona and Florida. It would appear investors are starting to inch their way back into some markets as price reductions become a regular part of the listing cycle.

People always assume that eCommission must flourish in a down market. Yes, demand for commission advances increases as agents are stretched further between closings, but the deals themselves are a little harder to approve than they used to be. The issues mainly relate to financing and dealing with bank owned properties. Right now roughly 40% of applications for eCommission involve some type of foreclosure situation.

As many of you know, getting banks to follow a specific timeline and actually agree to terms in writing can be very difficult. Unfortunately, we cannot approve a request for a commission advance on an REO without written confirmation that the bank agrees to the deal. On regular resale transactions, especially those with cash offers and no contingencies, we are able to approve advances in the customary timeframe of a few hours from receiving the completed application.

Here’s an upbeat story from Realty Times discussing other positive trends happening in real estate right now. Real Estate Outlook

So keep the faith. I’m not suggesting it’s time to uncork the champagne just yet but things do appear to be slowly turning the page.

eCommission
eCommission Blog

Some Open House Mistakes – a Buyer’s Perspective

Sean Whaling (eCommission) — Fri, 02 May 2008 11:52:20 -0500

I’m not a Realtor, so I’m coming from the buyer’s perspective on this. As I’ve mentioned in previous posts, my wife and I have been looking for a new home for awhile and have been through many open houses. In most cases, the listing agents were all doing a good job being pleasant and responsive, looking their best to appear enthusiastic about spending their Sunday afternoon this way. I admire agents. Working on a commission is hard so I’m not knocking anyone, but in a few cases, I couldn’t believe what I saw! Here are a few examples:

Fruitcake. I will admit, at least the effort was being made, but serving fruitcake to perspective buyers is never a good idea. Does anyone really eat fruitcake? I half expected to see little tags saying, “Gina and Steve. June 12th, 1986. Thanks for sharing our special day.”

Read the rest of the post here

Cats From Hell

Sean Whaling (eCommission) — Fri, 25 Apr 2008 15:50:08 -0500

I have nothing against cats or people who enjoy them as pets. Well, maybe I should qualify that, people who have less than two cats seem okay. My question is this: Have you ever been to an open house where you’re met at the front door with the wafting odor of kitty litter?

My wife and I took a look last weekend at this beautiful, 4 bedroom Victorian on a half acre. From the outside the house was perfect. But from the second we stepped inside our senses were assaulted by the unmistakable odor of “cats.”

The Listing Agent noticed our wrinkled noses and immediately pointed out that the sellers were offering a $5,000 allowance for “replacing the carpets.” Hmmmmm. I watch HGTV sometimes. I know there are people out there on “Property Ladder” and other similar shows who are able to look past all the gross stuff to see a home’s inner beauty. I guess I’m not one of them. I wanted to leave right away. But my wife is far too polite to spin around and walk out. She’ll waste time making small talk and looking in closets with the best of them. So there I stood not wanting to go any further than the foyer but seeing as my wife had already disappeared with the agent, I decided to poke around.

Read the rest of the post here

Broker Liability and the Commission Advance Process

Sean Whaling (eCommission) — Tue, 15 Apr 2008 12:24:35 -0500

Here’s a scenario: you are the broker of a local real estate office and one of your agents comes to you wanting to know about getting a commission advance. You have some options: either a) say no, but that could negatively effect your relationship with the agent, so you think b) offer the service yourself, but that would involve dipping into your own credit lines and in this market, money is tight so you decide to go with option c) refer your agent to one of the many commission advance companies out there…but which one? They are all the same, right? Wrong!

It appears the only similarity between commission advance companies in the United States is that we are all based on the practice of receivables factoring. Beyond that, no two advance companies are the same. As Broker, your biggest concerns over choosing the right company to work with are ones of liability and reputation. Generally speaking, you’re fine signing off on the advance, just as long as neither you nor your Company is ever held liable to repay it if the sale falls through. Secondly, you want to know the Company you’re working with sees you, the Broker, as the rightful owner of the commission and therefore requires your approval prior to funding. Right now in the marketplace, eCommission is the only commission advance company that works this way.

Read the rest of the post here

Subprime Mess – A Layman’s Explanation

Sean Whaling (eCommission) — Thu, 13 Mar 2008 11:22:15 -0500

My inspiration for this post came from a short cartoon a client emailed to me. It was hilarious. Before I start, I also want to say I am not an economist, just a guy running a commission advance business and trying very hard to offer a service to agents as safely and responsibly as possible in this crazy market. If anyone disagrees with this summary or feels I have missed something, I invite your comments.

So what exactly is the “Subprime Mess”? Talking heads on TV give summary opinions as to what is going on but for the average person the whole thing is kind of confusing. “Subprime” has become a very generic, overused term. To understand it, we need to explore its roots…

Let’s start with Joe Buyer and Moe Mortgage Broker. It’s 2006. Joe wants a house but not just any house, Joe wants a really nice one that’s bigger and five times more expensive than his current digs. Poor Joe Buyer hasn’t actually saved any money for a down payment and he doesn’t really think he can afford the monthly payments, but he really wants that house! Can Moe Mortgage Broker help? Of course! Moe Broker is operating under the premise that house values will always go up, so lenders don’t really need down payments anymore. On top of that, Moe Broker explains he can even get Joe Buyer into the house for a really low interest rate for a few years. Raising the rate later won’t matter because Moe’s premise is totally sound: house values will always go up. Joe Buyer is excited by this news...

Read the rest of the story here

Is a Mazda Miata a Practical Car for a Real Estate Agent? Pt. 2

Sean Whaling (eCommission) — Fri, 22 Feb 2008 16:09:57 -0600

As a catch up on this story, my wife and I were being crammed into a two-seat Mazda Miata by our agent, “Rick” and heading out to look at some open houses.

For those who don’t know, let me tell you about the inside of a Mazda Miata. It’s ridiculous. It looks like it was made by elves. The gear shift is a toothpick with a marshmallow on top. The door pulls only allow two fingers to slide under, so opening the door makes you look like you’re sipping a cup of tea. Everything is just so small! The steering wheel looks suspiciously like my kids’ Play Station game. I will try not to be so negative…it did have leather seats.

Rick was right about one thing: the seat belt did go around both us. Then he proceeded to put the top down saying it gave us “a lot” more room. I don’t know if this statement was true, or if it just made us feel less claustrophobic. But the top came down and away we went.

The first house on the schedule was only a few streets away from our present home. My wife and I were laughing the whole way about how silly we must look sitting on top of each other while Rick toured us around. Really, the only annoying part was the few occasions where I needed to move my leg so he could shift gears.

Getting back to the first house, we piled out of the Miata, met the listing agent at the door who handed us a nice flyer, and proceeded to walk through the home. It’s amazing how you can tell within the first minute of walking into a house whether or not it has any potential at all. But here’s where the story takes a turn. Rick finished his walk through quickly and headed outside to get into his Miata. My wife and I lingered behind to put on our shoes, and it was then the listing agent, who I will call “Gail” approached us.

“Can I ask you something?” she said. “Why are all three of you driving around in that car?” She sounded totally appalled. “I have been selling real estate for 20 years and have never seen an agent with a little car like that, certainly not in Texas anyway.”

We explained to Gail that we were somewhat surprised by Rick’s choice of vehicle as well, and that we had offered to take our car, but he refused. Besides, I told her we kind of liked Rick and were having fun with it. Gail was still disgusted. “Well when your fun wears off,” she said, “here’s my card. I have an SUV.”

eCommission Blog

Is a Mazda Miata a Practical Car for a Real Estate Agent?

Sean Whaling (eCommission) — Wed, 23 Jan 2008 12:53:45 -0600

I thought it would be fun to start my first post with an amusing true story. Maybe I'm wrong, but it would seem to me that if you are a Realtor showing up to drive perspective buyers around, a Mazda Miata would not be your first choice of car to own. For those of you who are unsure what a Mazda Miata looks like, here is a picture:

So...this is my agent's car. From here on, I will simply refer to him as "Rick." Despite the fact that my wife and I had never met Rick before, his smiling face was well known to us. You see, Rick's business card had been magnetically adhered to our fridge for a long time. I think his idea of including the local Dominos Pizza number was a good one. It definitely made it to our fridge and ultimately, got me to call him.

Rick seemed great on the phone. He's a real high energy guy and sounded very enthusiastic about finding us a home. He seemed to do all the right things, starting with asking a bunch of detailed questions about our price range and the number of bedrooms we needed. The next day a series of emails started arriving showing us homes in our area that met our description. I was thinking, so far so good. I like Rick.

Now we get to the heart of the story. We arranged to meet at 1:00 pm. Incredibly, Rick pulled up driving a black Mazda Miata. Perhaps he wasn't really listening when I explained we were a family of five! How did he expect us to fit in this thing? We had previously arranged for a sitter to look after the kids so Rick got lucky assuming they wouldn't be coming along, but it still left three adults and two seats! I smiled, took Rick aside and trying my best not to sound like a jerk, said "You don't really expect us to drive around in that?" I had offended him.

"This is a 1991 Mazda Miata MX5 convertible. It's in mint condition." He sounded really defensive. I tried smoothing things over by saying I wasn't insulting his car, it just seemed a little odd that he expected three people to travel in a car with two seats! I offered to take my car, but Rick would hear nothing of it. "Come on." He said. "I have three people in the front all the time. Besides, you two are skinny. The seat belt will go around both of you." Believe it or not, my wife and I actually got in. You won't believe how this turns out. If people care to know the outcome let me know and I will write more in my next post. Rick is actually a really terrific agent. In the meantime, I am wondering, are there other agents out there driving a Miata? Is this common?