Fed holds key interest rate at 5.25%

Can someone report on rates today please, by commenting to this post?  I hear they are the lowest since 1/1/06, is that true?

Can some of you email me for consideration as an RCG contributor?  We REALLY, REALLY NEED a couple of mortgage background RCG Contributors. Email me off site at Ardell@SoundRealty.biz

Thanks…running to show a couple of properties…will check when I return. 

[photopress:gorilla.jpg,thumb,alignright]Take a really close look at that Gorilla protecting the baby in his hand. 

The Gorilla could be NAR, with the baby representative of every Realtor in the Country.  The Gorilla could be the MLS system, with the baby representative of each and every one of its members.  The Gorilla could be a MEGA Broker, with the baby representative of the agents who work there.

But when is the baby representative of the Average Joe Consumer?  Where is the consumer “group” working as hard for the consumer, as each of those mentioned above, works hard for the real estate practitioner? 

Theoretically it is each state, and the licensing and agency laws of each state..  Clearly State Laws and Regulatory Boards are as big as that Gorilla, but how much do they really keep up with the changes in the industry enough, to propel the consumer to new heights?  Does the State really fight hard for the consumer in these changeing times?  Obviously not.  Which is why the “Consumer’s 100 lb. Gorilla” of the moment, is the Department of Justice and their suit against the National Association of Realtors. 

Redfin, Zillow, Zip Realty, For Sale by Owner in the MLS companies, these all represent the newer “alternative” business models who represent the Balance of Power for the Consumer.  They represent the Checks and Balances needed, to offer TRUE competition in the market place, from the consumer’s standpoint.  As an industry, we should not be playing “my gorilla can beat your gorilla”.  We should not be hoping the consumer gorilla’s fail, nor should we be doing anything to assist in their failure.  We should actually be HELPING the consumer gorilla get bigger and bigger, by meeting them in the middle.  Clearly there is room for at least 20% of the marketplace to be pulling toward the consumer’s side of this equation, isn’t there?

Why?  Why should “Traditional Brokers” HELP the Alternative Business Models to succeed?  Because WE NEED them, now more than ever, all of us.  The consumer needs them.  The industry needs them.  We need a whole lot more flavors of Kool-Aid out there.  Those of us who support alternative business models, are not “Realtor-Enemies”, as some call us.  We simply are acknowledging, what the DOJ is acknowledging.  We can NO LONGER PRETEND that “price-fixing” and “boycotting” doesn’t exist in this industry, by refusing to discuss the topic and sticking our heads in the proverbial sand.

I don’t know the total answer.  But I think that maybe every MEGA Broker should have a “Nordstrom’s and Nordstrom’s Rack” equivalent.  To some extent they do, by having the Premier Homes sub-section of the company, for Elite Homes.  Maybe it’s time to take that a step further, with the “Elite Homes” being the full commission, full service division of the company, and each should also have a “Discount Division” that offers break out plans and fees.  Maybe the Elite Division only has agents with at least three years of experience, and the Discount Division has the newbies…I like that.  More transparency there…isn’t there?

Brand new agent equals 1/2 the cost…something like that.  The same way some choose to go to a Dental School at a discount, or Hairdresser School at a discount.  Traditional companies can separate the newbies into a discounted service for the consumer who doesn’t want or need so much experience and cost.  Or better yet…let’s not use number of YEARS in the business, but number of closed transactions.  First ever transaction for agent equals lowest price.  Elite division equals 100 transactions or more at top dollar.  I like that better.

Someone with 10 years could have 15 sales…someone with two years could have 80 sales…so number of sales is my vote. Give the consumer a discount for using a newer agent, the same way you get a discount for using the hairdresser who has only touched a few heads with a scissor.

Instead of fighting the alternative models, every Traditional Company could EMULATE some of the great things about these companies, so that we all meet somewhere in the middle.

[photopress:odd_duck.jpg,thumb,alignright]I totally get, after 16 years, that I am an “Odd Duck” when it comes to this topic.  I truly have never gotten why agents seem to feel that Real Estate is an overly-competitive industry, relative to other fields of endeavor.

I rarely run into a competiton factor.  So I’d like to suggest to those who do, that maybe they are creating that scenario somehow, as in “What you resist, persists.”  Maybe you invite the issue of competition into your discussion with consumers, more than I do.  I’m not sure why I don’t run into competition as often as others seem to, but maybe by starting a “thread” on this topic, I can help some others deal with “fear of competition”.  In many ways, those who dislike/fear the new alternative business models, do that because they feel somehow it will impact them, when that is not at all the case, as I see it anyway.

Where do you all run into competition?  Seller calls me, for instance.  Wants to talk to me about selling their house.  I go to their house and talk about their house and how we (they and I) will sell their house.  That’s all.  Where does the topic go to some “competition” issue?  It doesn’t for me.  Are you, the agent, bringing the issue of “other agents” into the conversation you are having with the owner of the house?  And if so, why are you doing that?  If someone wants to talk to ten other agents before and after talking with me, that’s their business and not mine.  Usually they just hire me.  Once in a blue moon they don’t hire me and more often I say “Thanks but no thanks”, but mostly we, the seller and I, just get cracking at the work to be done to get the house ready for sale.  Where does this whole “competition” thing start and why?

Next example, buyer calls me and is considering hiring me as their Buyer’s Agent.  We meet and I decide if I want to work with them and they decide if they want to work with me.  That usually takes one meeting, sometimes two.  Once in a while I refuse to meet with them, but not very often.  One last week wanted a complete list of every transaction I did this year including all of my clients’ phone numbers!  That was a “thanks but no thanks” and I cancelled our first meeting.  But that is rare.  If my “competitors” are willing to hand over all of their clients’ phone numbers to a complete stranger at first contact…oh well!!  No skin off my nose, as they say.

Once a client is my client…that’s pretty much that.  Had a guy call me Saturday morning on his way out to ski, wanted to buy something he saw up in Whatcom County.  We talked for three minutes and I took care of it.  There we go.  Contract about signed around while he was off having fun.  Where’s my competitor there?  I have clients call me from all over the place like that.  We’re in Florida and saw a…  Hi, do you remember me, I want to sell now.  I get calls like this all the time.  How does a “competitor” make it into your conversation with people?

Again, I know I’m the odd duck on most issues regarding our industry…my thoughts on blogging included!!  I’m the  odd duck in that photo trying to figure out what everyone’s squabbling about up on that log 🙂  I’d love to hear from agents who think this is a competitive business.  Is this just perception and fear?  Or is it truly a reality in your every day life?  And if it is your reality and not mine, why is that? Even when I’m training and coaching agents…we don’t talk about “the competition”.  Rarely comes up.  Is it insecurity?  Is it just that I’m dense and SHOULD be talking about “the competition”.  I truly don’t get all of the chatter about all of the competition. Hundreds of people buy homes every month, probably thousands every month.  You only work with 2-5 in a month.  Sounds like damned good odds to me?  Where am I “off”on this? 

[photopress:contracts.jpg,thumb,alignright]The most common obstacle to being successful at selling your home on your own, on your own meaning a truly private sale with no agent at either end, is the contract phase.

Owners usually figure out all of “their stuff”.  Getting the house ready. Pricing the house. Putting out ads.  Being available to show the house.  The “missing” part is the “buyer’s stuff”.  While it may seem that the buyer should figure out their end of things…that is not a realistic expectation on the part of the seller, most of the time.  It is also the reason that many “successful” For Sale By Owner’s only end up saving a portion of the commission, and not the entire commission.  I have heard many stories over the last couple of decades from For Sale By Owners saying “everyone loves the house and then leaves, and we don’t hear from them again”.  That can be very frustrating for a homeowner.  The buyers come, rave about the house, leave, and the owner is left scratching their head saying “What’s up with that?!?!”

Whether a buyer is working with an agent or not, they usually focus more on looking at houses, than on what happens when they find the house they like.  Unless your house is so hands down, oh my god, have to have it…it is unlikely that a buyer will have the supercharged motivation needed to get to the next step.  Timing is everything.  If the owner whips out a contract when a buyer comes in…it may scare the buyer.  If they don’t whip it out before the buyer leaves, often the owner doesn’t get a second chance.

So here’s my advice.  Find a lawyer who will draft a simple, layman-term version of a standard purchase and sale contract for you.  Something an average buyer can REALLY UNDERSTAND, that covers all of the bases in something less than the standard legalese.  Make it on as few papers as possible, while still covering the main points.  Do NOT, in other words, simply use the standard format that agents use with multiple addendums.  Have most of the “addendum” topics covered in one standard contract.  If your house was built prior to 1978, have the lead based paint automatically built into the contract.  We use an addendum for that because some need it and some don’t.  But you already KNOW if your house was built prior to 1978…so get it put right into the contract, and have the booklet regarding hazard info readily available.

Instead of waiting for the buyer to have to say “I’d like to buy your house”, hand everyone who comes through, a sealed envelope with the flyer attached to the outside of it.  In the envelope include the Seller Disclosure Statement and the contract (and a pre-inspection, and…).  Complete the contract with everything that YOU want.  In other words, you make an offer to them…rather than waiting for them to make an offer to you.  Have the name and phone number of the attorney who drafted the contract in the envelope, so they can counter with modifications to your pre-presented offer.  Of course you should also state that they can use an attorney of their choice, OR call the attorney who drafted your document. 

When you hand them the envelope, tell them “everything you may need is in this envelope, including everything we know about the house”.  This way you are giving them information, instead of pressuring them with regard to buying your home.  If they like your house at all, they will want to open that envelope to see the Seller Disclosure Statement.

You might say as they are leaving, “If you are not at all interested, then I’d appreciate your leaving the envelope here to save a tree.”  A nice, easy way for them to let you know that they are not interested in buying your house, without offending you.  They are not saying NO to you, they are saving a tree 🙂

Make it as easy as possible for a buyer to get from liking your house to buying your house, and you may be able to save not just half of…but the entire, commission.