Every damn place you turn around, some marketing whiz seems to have all the answers to solving your cash flow problems by buying their book or report on how to make money with Short Sales. There's even a few 125 X 125 ads posted over here on the right --- >
There's just one small problem with every Short Sale book, report or seminar this boy has ever seen: Short Sales take friggin forever to close.
Two to three months to get the bank to approve everything, then the poor buyer who just couldn't wait anymore drops out of the picture and buys a FSBO on their own by using one of the local real estate attorneys.
I saw an interesting trend with some of my sharper agents this year so far. Below I'm going to share what they're doing that you might consider doing if your broker isn't going to come through on your next commission advance.
Run a Newspaper ad and a Radio Ad. Announce a FREE Seminar for home owners how to avoide foreclosure and sell their home on their own.
You're probably now thinking right now, (Bart... your friggin' whacked.) Okay, the knee jerk reaction here is probably that. But think about it. You get branded as a smart cookie when you offer a FREE seminar like this. Because during your nice Power Point presentation while your audience is sitting munching away on finger foods, coffee and soft drinks... the audience is formulating a nice image of you in their minds. Their mental reaction to you will be, "Wow, a smart agent that for once is educating me on the ins and outs of this market we're in right now..."
Others in the audience need to be TOLD that if they have NOT bought a home in the past 3 years --- THEY STILL QUALIFY under the Obama $8,000 Tax Credit for buying a home. So be sure you mention these tasty tidbits in the newspaper and radio ads, as this will be sure to bring a nice mixed crowd. There are countless Websites where only the First Time Homebuyer mentions the $8,000 tax credit which is 100% wrong. Anyone who has NOT bought a house in 3 years ALSO qualifies. And not many next home buyers know that. And the party ends on November 30th.
In your free seminar, be sure you partner up with a local Mortgage company, and a real estate attorney. Tell the audience all the places they can list their home for free (besides CraigsList) and be sure your let your local real estate attorney explain what an Attorney at Fact transaction is. Including the savings.
Let FSBO's know that there ARE agents who will often bring a buyer and may knock on their doors with a qualified buyer. Tell them and SMILE AS YOU SAY THIS that 2% - 3% sales commission to the agent's buyer is a LOT better than coughing up 6%.
The Do It Yourself strategy will appeal to some of your audience. Others will approach you and still sign with your brokerage. The days of the full service, 6% sales commission model are eroding away very quickly. Glenn Kelman of Redfin.com represents the new breed of e-Brokers coming to your home town. They do the entire transaction for $3,000. If they have dual agency and double end the deal, some of the closing costs are even rebated.
If your broker can be flexible, the Bartman predicts the next big push will be the A La Carte Services menu for your customers.
So if the listing doesn't want to be shown on Realtor.com, the local RE Guide and just wants the yard sign, no virtual tour, no frills and they will demand 3% closing costs... If your brokerage ain't making it on 6% anymore... then trust me.
You need to be prepared to offer your persnickity listings big discounts if they really don't want full service crammed down their throats. Help U Sell and Assist 2 Sell seem to be thriving quite nicely here. What do they know that you don't?
This customer driven selection of full services (6%) down to services a la carte for 3% or lower are proven models that work.
EXERCISE: While every American Fortune 500 firm seems to be shedding jobs, reporting quarterly losses, why is it that we always see WalMart doing just fine whether we're in an UP or DOWN market?
They are the Discount Store where people love to shop. People like to Save Money, and every time I watch CNN, I hear that WalMart is opening another new store in another town. WalMart is hiring more people. At the same time, I read another Coldwell Banker (or some other full service brokerage) just shut down.
Your old 6% business model was fine for a few decades. But not today.
If everybody wanted full service and didn't mind paying full price for everything, then WalMart would never exist and there would only be Neiman Marcus and Dillards stores out there where everybody can pay full price for everything.
Discount simply works. Refusing to bend from the old school way of charging all listings 6% is only going to be a slow and painful way to deplete your cash reserves.
The sooner some Staving Agents out there embrace that idea, the sooner you're going to see some sales commissions.