But, a couple of readers emailed me the article, so I feel obligated to comment (and I am grateful for that obligation – thank you for reading)The study (pdf) is less a story of how much more unrepresented sellers sell their homes for than those who choose to hire a Realtor, and more about the effects of a viable alternative to the MLS, which is currently the best way to market a home.We focus on the city of Madison, Wisconsin, where a single web site (fsbomadison.com) has become the dominant for-sale-by-owner platform.A few thoughts:1…. The National Association of Realtors (NAR) argues that Realtors provide valuable help with setting the listing price, preparing the house, checking potential buyers’ qualifications, showing the house, bargaining the terms of the deal, and handling the paperwork.5…. Maybe the best “by owner” site in Charlottesville is c-villebyowner, but their market share remains infinitesimal.In the Charlottesville area real estate market, some neighborhoods are more likely to be successful for those who choose to represent themselves in the sale of their homes – those that are fairly cookie-cutter and high-traffic neighborhoods may be better candidates than those that are not, but why would someone want to limit the number of people to whom they market their most valuable asset? What about the pictures?By the way, the study is outdated.The study found, however, that homes listed with agents sold more quickly — with a 25 percent probability of selling within 60 days versus a 16 percent probability for FSBO-advertised homes.The average days on market in the Charlottesville area, right now, is trending between 74 and 106 days.
Browsing Category Public Perception
Century 21’s new ad
Seems to be targeting Redfin.Despite the comment, “to watch your eyes when you walk into a home, and know right away that you are in love with it” … it’s a decent ad. Buying and selling residential real estate is an emotional process, but a good Realtor should focus on removing the emotions from the equation – managing buyers’ emotions is sometimes difficult, and if a buyer “loves” a home, sometimes it is more challenging to manage those emotions.A better campaign would be one that identified the project/transaction management aspects of a real estate transaction and removing the emotional aspects of negotiations. Speaking from personal experience, having a buffer between Buyer and Seller can be extremely valuable – both from an emotional and financial perspective.
A call for an end Cooperative Compensation
As a profession, we need to rid ourselves of Cooperative Compensation and the practice of the listing broker paying the Buyer’s Agent.Cooperation between Brokers need not go away…. That is always a fun conversation with first-time homebuyers as well as more-savvy ones.Buyer: So, how do you get paid?Buyer’s Agent: Well, the Seller pays me.B: What?BA: Well, not really, you are paying for the house, and you are getting the mortgage, but the Seller has agreed to compensate my company for my services.B: What do you mean?BA: It’s complicated.B: Well, am I bringing the check to closing?BA: Yes.B: Then how and why is the Seller paying you?BA: Because that’s the way it’s always been, and the laws have not changed sufficiently to allow for buyers to finance their representations’ commissions into the mortgage, Realtors have not adapted to the new realities and they are stuck in the mindset from when all agents represented the Sellers.B: But why is the Seller paying you?It’s easier for the Buyer’s Agent to just take whatever the Seller is offering – there is no negotiation with the Buyer about the Realtor’s compensation, so much so that often times the answer to the “How much is your fee” question is “It’s free to you – the Seller pays me!”I went around and around with some of my clients for several hours one time, agreeing with them the entire time how convoluted, antiquated and archaic the Buyer’s Agent’s compensation arrangement is, but there was nothing we could do to change it…. If Realtors want to equate themselves with other professionals, we need to be paid that way, heck we could lead the charge towards transparency in fees.Attorneys are paid by their clients, except when they lose, and do we really want to equate ourselves with that side of the legal profession?… The time may be right, and beneficial to everybody – consumers, Realtors, regulators – to change how we do business to a more transparent, ethical and professional way of working and compensating.Maybe we can rid ourselves of Dual Agency while we’re at it.
Reflections on this weekend
This weekend I had the opportunity to meet with two different buyers, both of whom are going to be Medical Residents at UVA, and I hope I listened well.1) “Your blog is very helpful – more-so than your website.” While somewhat difficult to hear, this reflects the changing dynamics of how people search for homes. Buyers and sellers can search for homes anywhere; finding the information interpreted in a cogent way seems to be more challenging to find.2) Email cannot replace interviewing Buyer’s Agents face-to-face – but having a blog can help, as that Buyer has the opportunity to learn more about who that agent is.3) I have a new project – a flow chart depicting the various steps of the home-buying process.4) People notice when you listen and take notes (which I do).5) When I am meeting with Buyers or Sellers, I look at the initial meeting as a job interview, and I hope that they do too. Not taking anything for granted – ever – is crucial to success.As a side-note, Jott has been an excellent addition to my business.
College town investment is not for everyone
The title says it all; that this WSJ story focuses on Charlottesville is almost beside the point…. with the University of Virginia growing, some “student” housing might prove to be a good investment. My favorite part of the story:Shortly after I did the math, I contacted a real-estate agent in Charlottesville, Va., who was well acquainted with spreadsheet-toting parents like me. And he did something quite out of character for a broker — he talked me out of buying.Honesty will go a long way.
Bloginar today in NoVa
If you don’t take it seriously, you will fail on an international stage; likely few will see it, but your words will be there forever. I hope that I was able to convey, in the short period of time I had, my passion for the business, for blogging and for doing things right – the first time (and learning from all the inevitable mistakes)…. A few of the points covered:- Why blog?- Benefits of Blogging- Transparency/Reputation- Knowledge gained through blogging- Local -v- National blogging- Should you blog your listings?- Potential Liability- Where to get ideas?- Above all, be honest in all that you say or do. Your words can be used for and against you.I would be happy to email anybody my list of real estate blogs I read every day.
Buyer beware
Two recent vignettes -Lender story: Three days before closing, a Charlottesville lender, who had not previously given a written GFE (Good Faith Estimate) to the Buyer, somehow added ~$3,000 in mystery fees…. At no point does this agent mention agency.”Agency” means every relationship in which a real estate licensee acts for or represents a person by such person’s express authority in a real estate transaction, unless a different legal relationship is intended and is agreed to as part of the brokerage relationship…. Nothing in this article shall prohibit a licensee and a client from agreeing in writing to a brokerage relationship under which the licensee acts as an independent contractor or which imposes on a licensee obligations in addition to those provided in this article…. A real estate licensee who enters into a brokerage relationship based upon a written brokerage agreement that specifically states that the real estate licensee is acting as an independent contractor and not as an agent shall have the obligations agreed to by the parties in the brokerage agreement, and such real estate licensee and its employees shall have no obligations under §§ 54.1-2131 through 54.1-2135 of this article.Moral to the story?