Agents becoming extinct?
The news cycle is at it again with threats of the real estate agent becoming extinct, often perpetuated by self deprecating agents themselves1. People fear change, whine about making less money, and that consumers are being fed too much information.
more ..... http://agbeat.com/editorials/will-real-estate-agents-become-extinct-over-time/
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Over the past ten years, consumers have become empowered through technology, providing them with a wealth of resources and tools to find a home. Information that was once considered privaledge, is now available online for homebuyers
Traditional real estate brokers are trying to justify their relevance in order to continue to charge high commissions to cover their expenses and continue on wasting money on the agent trying to motivate them, versus focusing on the consumer.
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Second experience…A consumer (not client) first called me last fall; he inquired about real estate consulting, specifically about paying by the hour. I spent quite a bit of time explaining how I work with clients and the choices I could provide in working with him. I would not however go into great detail (i.e., how much I charge) without meeting him in person first. He wouldn’t commit to a face to face meeting. I let it go and he sent me an email saying he had found another consultant to work with. I wrote him back and wished him success.
About two weeks ago this same person called me back. He said things did not work out with the other consultant and asked would I still be open to services paid by the hour. I said I would be open to it but was very busy and would need to schedule time to meet face to face first. No appointment was made.
He called me two days later; the other consultant told him that paying by the hour for our services in Arizona was illegal according to this realtor’s broker. He said that he had called the Arizona Department of Real Estate (AZDRE) and they also told him that this was illegal. I asked him who he spoke with because I would like to talk to them. He didn’t remember, but it was the enforcement department. I told him that I would make some calls and get back to him. My first call was to our broker legal hotline. I was told that it was not illegal to charge by the hour as long as the services provided were towards a buying or selling transaction. This “as long as” qualification sited by the lawyer was news to me; but, in this particular instance, it was not my question at hand. The legal hot line lawyer told me to contact the AZDRE to make sure that this was also their understanding and try to talk to the person that told this consumer that it was illegal to charge by the hour. So, I then called the AZDRE. The first person I spoke with was in enforcement – a legal aid that couldn’t or wouldn’t answer my question. She was more concerned with getting this consumer’s contact information and my contact information and getting me to dispute resolution. I told her there was no dispute, merely a question. She advised me to prepare a formal statement of the “incident” and send it to dispute resolution. I calmly explained that there was no dispute but that I would like to talk to someone. She finally transferred me to the Dispute resolution department. It was my lucky day as the phone was answered by the personality of the year. I explained the situation and asked my question and was barked at saying that if it were him and as soon as I took his check, he would contact an attorney and have me sued. He then, as fast and as monotone as he could, told me the state statutes I would need to comply with – still not answering my question. To make this long story shorter, it was a negative experience to say the least. I reviewed the statutes and thought to myself…I’m in compliance with this, but ultimately, this whole situation gives me a questionable feeling. I called the consumer and said that I would need to seek legal counsel before going forward with any hourly arrangement. But for now, I would be glad to offer him buyer representation service in a more traditional manner or with a shared risk type of fee schedule. He didn’t seem interested in that.
On Friday the consumer called again and his message said that the AZDRE called him back and told him that paying a broker by the hour was NOT illegal. Of course, the AZDRE did not call me back with the answer to my original question.
Does this sound confusing or what??
Today I spoke with an attorney about reviewing all of my consulting forms, consulting marketing materials, advertising, etc. for use here in Arizona. Based on the first experience I shared with you, I definitely want to continue doing business this way, especially now with buyers. Based on the second experience I shared with you, I definitely want to dot all my “i”s and cross all my “t”s before any advertising campaign to the general public about the choices.
My bottom line in sharing these stories are these…if the real estate departments as well as other brokers are providing mixed messages about doing things differently than the norm, what does the public think about paying by the hour - legal or illegal? If you show your value and provide service that exceeds expectations, what does the public think about paying by the hour? They may just surprise you like they did me and tell you that they want to send you a check for your time and expertise without ever buying or selling a home.
Wishing all of us continued success!
]]>Brought to you by Family Abstract, Inc. Think of us next time you take action!
More ..... http://socialmediatoday.com/davidjohnson4/466776/forget-about-roi-start-thinking-about-roe
]]> Note from Lester ... We might call it "Return On Enchantment.Your opinion please. We want impact that the seller received actual value.
First you have to know that we have a compensation menu option which is called "Shared Risk Option". We give a commission discount of $4 in exchange for $1 up front startup engagement fee (non refundable) upon signing a listing agreement. (Our minimum fee is $4,000)
We are considering an image of a bank check 2 feet high by 4 feet wide with the amount of commission savings written to the seller. The amount would be equal to 6% minus the actual sales commission (maybe 4.5%). This giant fake bank check would be presented to the seller at the closing table and we will take a photo. If the seller is not present at the closing we will have a photo of the bank check and a photo of the seller (photo taken previously). These photos will be posted on our website (with permission).
For buyers we will use the about of commissions that we rebated. The closing statement gives a rebate credit on the closing statement. We can use the same concept to create a giant fake bank check for the rebate amount.
Your thought would be appreciated to improve or shoot down this idea. The purpose it to imprint and reinforce our value and help create testimonials online.
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Your specific response concerning the amount of your consulting fees can create a negative response.
Watch this short video of an example of how a professional real estate consultant handles phone calls. Notice that they do to discuss their fees on the phone.
A real estate consultant needs more facts to determine how much time and effort is required to help the prospective client. It may be wise to look a real estate property before disclosing fees.
Doctors, lawyers and CPAs do not quote their fees on the phone or by email. Can you effectively buy a house or commercial property by phone only? Prospective clients must know, like and trust you before they become a client. If you are using an internet dating service, do you want to meet that person before you get married?
More ..... http://realtyconsults.wordpress.com/2012/03/09/rules-for-real-estate-consulting/
]]>More ..... http://agbeat.com/real-estate-news-events/list-on-realtor-com-flat-fee-under-fire-by-nar/
Note from Lester... There are five states with Minimum Service fiduciary obligations and standards therefore the brokers that stick a sign in the ground can not profitably charge their low flat fee.
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Statistics from the past 30 days are:
8 home sales: 4 sold for less than $45,000; 1 sold for $77,000; 1 sold for $110,000; 1 for $149,900 and the last for $220,000 (which was priced at $45.39 a square foot, it was almost 5000 sq. ft.)
]]> The county did not have any multi-family or commercial sales and we had 1 land sale.I've been trying to figure out a way to be able to charge consulting fees here, but based on our sales history, I'm worried that our market won't be able to support them.
Our average family income is about $35,000 per year. For those who inquire to purchase a home, we find that they either don't have the credit to qualify or the money to qualify. Our average sale price per square foot is $44.70. A very good agent can expect to sell one property every two months.
So, I guess out of all of this out loud thinking...how do I introduce the consulting method to people in a way that won't have them bolting out of their chairs to the next office. Here is the bottom line thought process from clients and customers: "I don't care what you have to do to find me a home...I don't care what you have to do to sell my home (I've actually had sellers say this to me)...I want it done and for the least amount that I would have to pay. If I have to pay for it out of my pocket, I don't want to do it. If I can pay for it on a credit card or roll it into the closing costs, then I'll do it." It's almost if they only want to spend money if they don't "feel" it.
I realize this is all crazy...but it's something that I am trying to overcome and I know that I have hit a roadblock in thinking of a way to overcome these obstacles. Any suggestions? I don't have anyone around here that I can shoot these thoughts around with...
]]>If you didn't view the first video, not to worry because this video should really speak to each real estate professional. Here is why. Mr. Kennedy states, "Stop focusing on selling stuff for income, instead on getting customers to build equity"
This statement applies to our industry in so many different ways. Remember to take notes as Dan asks--Trust me this video alone maybe your business's savior.
Quick question, can anyone tell me what is our industry's fence and what happened to that fence?
Well here is the link. www.renegademillionaire.com/video/2
Enjoy!
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How are you attracting customers? What tools are you using to fill your pipeline?
This link should take you to his introductory video. www.renegademillionaire.com/video/1
This free video is filled with alot of good information.
]]>Anyway, he told me that he had already seen the interior of the property and was interested in writing an offer if my answers were satisfactory to him. I took that brief pause to explain that the property had a pending contract, so that any offer would be a backup contract. I answered his questions and he still wanted to write a backup.
]]> At that point, I thought this would be a very good time to explain my rate schedule and for writing a contract my fee would be $50. If the contract went through then I would refund the $50 to him. If it did not go through, then the $50 would be for the time we spent writing the contract and anything further that would take place.He agreed and we scheduled a day for him to come in and sign the contract.
About ten minutes later his mother calls me. "I bought a house just a few months ago and I never had to pay a fee! You are lazy and don't want to work for your money."
So, I explained the way I work and my rate schedule. Her response: "I don't care if you get paid or not! My son is not going to pay for you to write up a contract. You get paid by the seller not the buyer!"
From what I understand she called another agent to have her write the offer, but that agent for whatever reason chose not to help her. I found this out from the listing agent.
Unfortunately, this is the feeling of many people who reside in our area and it is difficult to sell real estate even in a traditional setting. It's not unusual for someone to walk away from a purchase at closing...it has already happened twice this year and we've barely gotten started!
Any thoughts on whether or not consulting is going to work here? Even though my broker is not against my trying this, she is worried that because I am the only agent trying it that most people are going to be like the lady above and I might drive business away because they will want to use someone from another company who doesn't charge any fees, whether refunded or not...
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Its mission is simple and shouts in chalk from a wall that’s been converted to a giant blackboard: Making House Hunting Easy.
TheRedPin.com is among the first of a new breed of realtors in Toronto — tech-savvy data crunchers who are determined to give homebuyers the tools they need to find their dream home from the comfort of their own computer.
This so-called Virtual Office Website (VOW) is far from alone, and a far cry from the Realtor.ca site that has provided consumers with just the most basic of MLS information for years.
Over the next few weeks a host of other VOWs — from information-rich realtysellersrealestate.com and realosophy.com to the far more basic searchrealty.ca — will be rolled out across the GTA. Some, like TheRedPin.com, will offer significant discounts in realty fees to house hunters who do most of the legwork themselves.
“Ninety-five percent of Canadian homebuyers start their search online, but this isn’t like the travel industry where you can ahead and just buy your own ticket.
“We’re not a discount broker — we’re still a full-service brokerage offering analysis, property valuation, negotiations and a network of professionals who provide mortgages,” says Rokham Fard, one of four co-founders of TheRedPin.com which claims to be an even bigger database of listings than MLS.
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First introduced by psychologist Anders Ericsson and later featured in Malcolm Gladwell's popular book, "Outliers: The Story of Success," was this idea that you could become a genuine expert in a field with approximately 10,000 hours of practice — roughly 3 hours a day, every day for a consecutive decade.
But is that really what it takes? And what's the real difference between being a "natural" and a prodigious practicer?
In a study published in Harvard Business Review, researchers say that you must pass three tests to know if you've reached a level of expertise:
1. Your performance must be consistently "superior to that of your expert's peers." You can't really be an expert if you are on the same level of expertise as everyone else.
2. Your expertise must produce consistent, concrete, successful results. For example, if you're an expert at building a car, you must be able to achieve a superior end result in a consistent manner.
3. Your performance "can be replicated and measured in the lab." If you can't do it again, it isn't consistent, and you won't be able to measure it. So how can you prove your expertise?
In order to get to this level, it's obvious that you're going to have to practice and put in a lot of sweat, but not all practice is useful practice. The Harvard Business Review says:
When most people practice, they focus on the things they already know how to do. Deliberate practice is different. It entails considerable, specific, and sustained efforts to do something you can’t do well—or even at all. Research across domains shows that it is only by working at what you can’t do that you turn into the expert you want to become.
According to Gary Marcus in Psychology Today, if you keep practicing what you know you are already good at, you will never be able to reach an uncomfortable level that will force you to push harder. This means you'll never improve or reach your greatest limits.
"Getting better isn't just a matter of logging hours," Marcus says. "It's a matter of developing a focused program of targeting your weaknesses and broadening your skill set."
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