Zoom Call 5.14.24 William Piotrowski Let's Talk Real Estate
The Zoom call this week was monitored and presented by William Piotrowski. The tone of this call was more of an exchange of information very similar to the conversations anyone in the business may have had with fellow professionals while on a break at a seminar.
There was some conversation on the lack of support by NAR and their focus being revenues received by them and the lack of ROI received by agents. Many feeling it continues to be a one-way street.
He then offered comments on an article of dis-information that was in the New York Times on renting vs owning.
In the article, they attempted to show that with a $2,000 a month rent on a $500,000 home, a renter would save $133,000 over a 10-year span against paying a mortgage. There was a lot of back and forth on this article, yet when I looked up the article, the chart used as the basis of the article was one that was originally used in a similar article dated May 14, 2014, and I regret that I hadn't looked up the article at the time of the call.
Not knowing what the interest rates may have been at the time, the reality of the article when looked at today is the renter would have been paying their own mortgage, and with the appreciation of the past 3 years, that $500,000 home would have better than doubled in value.
What William was able to show was that on buying a house valued at $630,000 purchase saved over $183,391 over 10 years.
This led into a conversation on using comparables for an appraisal to get a mortgage and the differences that one appraiser may have against another,
William then offered out a question to the attendees as to what types of tools would a lender need to offer to a buyer's agent to assist the with their mortgage.
He used as an example a quick calculation an agent could use when trying to demonstrate to a seller the net profit on a sale. Using a $300,000 selling price, he suggested an agent use a figure of 10% as the costs to sell a home. This would include commissions, title fees and additional costs.
Assuming the sellers had a $200,000 mortgage balance, their net profit would be roughly $70,000.
He then went into a topic that he felt was a trend of the future with the issue of fees being so much in the news. He had asked an agent in the Chicago area of they would take a $1,000,000 listing for a 1% fee. That agent balked as not being industry standard. He felt that was not a wise thing to do given the current negativity facing agents over the compensation for both sellers and buyers.
His belief that having 10 houses, at $1,000,000 each and a 1% flat fee would generate $100,000.
That was a standard for a now defunct brand that wasn't able to get their agents to sell sufficient to stay in business.
He then discussed agents in the Chicago area selling homes with open listings. This would be asking the seller what they wanted as a gross value on the sale and the agent would then sign up the listing with the understanding that they would take anything over $500,000 as their compensation.
This was discussed heavily with the majority of agents on the call noting that it is a practice that first, violated the agent's fiduciary obligations to the seller, and was also not legal in the majority of states. It is also referred to as a net listing.
The conversations went on with people noting the types of deals being encountered in their areas and the impact the changes coming in August will have on the business.
Zoom Call 5.14.24 William Piotrowski Let's Talk Real Estate
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