Homeowner Sues Zillow Over "Sloppy" Value Estimate
July 14, 2017
Since 2006, Zillow has been posting "Zestimates" of property values for the world to see.
And for just as long, homeowners and agents have griped about what they consider inaccurate estimates.
Disgruntled seller Barbara Andersen went farther than just complaining. She filed a lawsuit against Zillow in May, seeking an injunction that would force Zillow to remove the estimate of her Chicago-area home’s value from its site.
Andersen, a real estate attorney, paid $630,000 in 2009 for a new home in Glenview, IL. She is trying to sell the house by owner for $626,000, but she says she’s being undermined by Zillow’s low-ball value, which has presented "a tremendous roadblock."
Andersen says her suit is unlikely to be the last legal action filed against Zillow by a homeowner. "They’re going to become the subject of a lot more litigation," she predicts.
Indeed, in late May, Andersen switched gears representing a group of homebuilders in a suit against Zillow. She’s seeking class-action status for that suit.
"Plaintiffs and the class will continue to suffer irreparable injury with the current Zestimate placed by Zillow relative to their properties without the granting of an injunction to prohibit this conduct," the suit says.
More on Andersen’s lawsuit, plus new discount models, and data on Realtor income appear in the July issue of Real Estate Broker’s Insider newsletter.
ALTA Warns of Scams, Encourages Consumer Education
June 29, 2017
Homebuyers are being targeted by wire fraud schemes aiming to poach funds for real estate closings, and the American Land Title Association (ALTA) wants the federal Consumer Financial Protection Bureau (CFPB) to take action.
"Despite efforts by the title industry and others to educate consumers about the risk, homebuyers continue to be targeted," says Michelle Korsmo, ALTA’s chief executive officer. "With the spring homebuying season underway, it’s vital to continue raising awareness about these schemes. The CFPB should take this opportunity to protect consumers from criminals looking to steal their money."
The scam typically plays out like this: Fraudsters gain access to unsecure email accounts used by consumers or real estate professionals. They use this access to find transaction patterns and details to make their phony instructions seem legitimate. Thieves instruct the buyers to send the funds to an account, and the money vanishes.
More on recent consumer scams and resources to help business owners protect their email accounts appears in Real Estate Broker’s Insider newsletter.
Independent broker uses training
and support to build loyalty
June 16, 2017
At his 1,000-agent company in Milwaukee, Joe Horning takes pains to provide education and services that keep agents loyal.
Horning is president of Shorewest Realtors, a third-generation firm he runs with his brother. He’s also 2017 chairman of Leading Real Estate Companies of the World, the network of independent brokers.
Horning says his top priority as head of LeadingRE is to promote initiatives that help independents compete with affiliates of large networks. As an example, he points to LeadingRE’s Maestro training course for new managers.
"I put six new managers through the program, and they absolutely loved it," he says.
The focus on training extends to his own company which he says is one of the few companies that still has a live training class.
"New agents tend to thrive with us because we have hands-on training, and we have a mentoring program. We have a lot of agents from other companies, and they are amazed at our education. We teach them how to sell real estate, not how to get a real estate license. They role play. Different agents come in and talk about how they do business. Some like to do cold calling, some like to go door to door, some like social media. There’s no one way to do it," he says.
The complete interview with Joe Horning appears in the June issue of Real Estate Broker’s Insider newsletter.
After Attack on Agent, New Worries About Staying Safe on the Job
June 1, 2017
An April attack on an Indiana real estate agent has renewed concerns about Realtor safety.
Assaults on Realtors remain rare, but the latest episode brings back memories of the Arkansas agent who was murdered in 2014. That incident led brokers and agents to vow to take safety more seriously — and, by some accounts, agents have grown more aware of the risks they take.
But spot checks by Real Estate Broker’s Insider indicate that many agents aren’t especially cautious.
During the 2016 summer selling season, the newsletter’s editors visited 16 open houses in three states to see how agents approached safety. At none of the properties were our editors asked for ID, and many female agents ignored rudimentary security advice about not working alone and not wearing high heels. One female agent worked alone at an open house in a gritty part of Los Angeles. And an open house in Florida was left unlocked and entirely unattended.
A number of mobile apps have stepped in to help realtors stay safe while showing properties and at open houses. Relying on GPS technology, the apps typically allow users to enter details of an appointment, and to tap the device to indicate that all is well. If the appointment time expires or the device’s location changes, emergency contacts are notified.
The full article on keeping agents safe appears in the June issue of Real Estate Broker’s Insider newsletter.
British Discounter Plans Ambitious Expansion into U.S. Market
May 18, 2017
Purplebricks Group, a company that has ruffled feathers in Britain’s real estate market, says it aims to spend $60 million to expand in the United States.
The company launched in the United Kingdom in 2014 and gained attention by charging a flat fee of about $1,000.
Purplebricks later moved into Australia. Now it’s targeting an even bigger prize — the U.S. real estate market.
Like many disruptive brokerage models before it, Purplebricks promises to make such a big marketing splash that agents won’t need to worry about cold calling and door knocking.
"The Purplebricks model should allow agents to spend more time focusing on looking after customers and selling homes, rather than a significant proportion of their time being taken up prospecting for the next listing," the company said in a statement.
Purplebricks has aired a series of cheeky adverts in Britain touting its low fees. In one spot, two women chat over tea about one woman’s recent home sale. The other asks if she used Purplebricks.
"Aren’t they just online?" the seller asks.
"No they’re proper estate agents, real people," the friend responds. "They just don’t charge commission."
Details on the English invasion appear in the May issue of Real Estate Broker’s Insider. Click to visit the newsletter website and view the Purplebricks ads. And while you’re there, consider starting your monthly subscription to Real Estate Broker’s Insider newsletter.
Brokers Try Sports Sponsorships
May 4, 2017
On yard signs in the Dallas area, Century 21 Judge Fite signs sport the iconic star of the NFL’s Cowboys.
At the spring training home of the Baltimore Orioles, agents from Michael Saunders & Co. staff a booth aimed at pitching properties to out-of-state visitors.
And at the arena of the Pittsburgh Penguins, hockey fans see signs touting Northwood Realty.
After a half-decade of retrenchment following the housing crash, real estate brokers once again are investing in high-dollar sponsorship deals with pro teams. Amid intensifying competition for agents and clients, aligning with a big-league team can add credibility to a company’s marketing pitch.
"The biggest advantage is a connection to the community, and greater relevance in a particular market," says Scott Becher, a sports marketing consultant. But costs can vary widely, Becher says, depending on what’s included in a sponsorship deal.
He offers one caution: You shouldn’t expect that because you’re a sponsor, your agents will land listings when millionaire players sell their mansions.
Information on these big ticket sponsorship deals as well as the benefits of sponsoring local rec teams appear in the May issue of Real Estate Broker’s Insider newsletter.
Big Brokers Report Rising Revenues, Fatter Profits, Some Challenges Remain
April 20, 2017
It’s nothing like the housing boom of 12 years ago, but today’s real estate market is on a decided upswing, one that has rewarded the nation’s largest brokers with higher revenue and profits.
But, as Realogy Chief Executive Richard Smith indicates, this boom faces a number of headwinds, reflecting the muted nature of this housing recovery.
Among the challenges real estate brokers face in today’s bull market:
Intense competition. One hundred percent companies and technology-driven brokerages such as Redfin are elbowing their way into increased market share.
Split pressure. As the joke goes, agents won’t be happy until brokers cough up unlimited services and 100 percent of the commission. Until they land that deal, they’ll keep negotiating for better terms or switching brokers.
A constantly shifting market. Now that distressed sales have disappeared and the heat has left the high-end market, the momentum has shifted to entry-level homes.
Rising mortgage rates. Mortgage rates spiked after the presidential election, then flattened. However, most industry experts expect rates to continue to rise through 2017.
More on current trends and how broker/owners are meeting them appears in the April issue of Real Estate Broker’s Insider newsletter.
With Commission Rates Still at Record Lows,
April 6, 2017
Commission rates remained at or near the lowest levels on record in 2016, according to Real Estate Broker’s Insider’s analysis of regulatory filings by Realogy Corp., the nation’s largest broker.
At Realogy’s company-owned operations the average commission rate remained at 2.46 percent in 2016. That matched the record low in 2015.
For Realogy franchises, the average commission slipped slightly to 2.50 percent, down from 2015’s 2.51 percent, but still a bit above 2006’s record low of 2.47 percent.
In response to falling commissions, some big brokers are emphasizing one-stop shopping, particularly on the mortgage front.
Realogy in February announced a new mortgage origination joint venture with Guaranteed Rate, one of the nation’s biggest retail mortgage companies.
RE/MAX also has begun to stress mortgages. Its new Motto Mortgage brand is a franchise system of mortgage brokers.
Insights into current commission rates and the renewed emphasis on one-stop shopping appear in the April issue of Real Estate Broker’s Insider newsletter.
Converting Leads: Make an Appointment and More
March 23, 2017
David T. Sprague runs six RE/MAX offices in the Seattle area, but he’s never too busy to call online leads just moments after an alert pops up on his smartphone.
Sprague says that agents fail to respond to more than 90 percent of leads, which means they’re leaving money on the table.
In the March issue of Real Estate Broker’s Insider, Sprague offers readers eight essential tips for converting leads.
Tip number three: Make lead follow-up a part of your daily business. Devote 20 or 30 minutes a day to this essential job. "It’ll snowball if you can dedicate some time every day, usually in the morning," Sprague says.
Dirk Zeller, head of Real Estate Champions agrees. He advises clients to treat everything as an appointment. With appointments for prospecting and for lead follow-up among the most important business appointments of the day.
In the end, consumers may complain that agents take too long to follow up. But almost no one gripes about agents who call back too quickly, or too often.
Details on all of Sprague’s strategies for converting leads appear in the March issue of Real Estate Broker’s Insider newsletter.
Broker Pushes Back at Split Pressure by
March 10, 2017
For years, real estate brokers have experienced relentless pressure on splits. One Florida broker is pushing back.
Jay Phillip Parker, the head of Douglas Elliman Real Estate’s Florida operations, says he is persuading agents to accept slightly less generous splits. In return, he vows to help them sell more homes by offering more services. For instance, the company now handles photography and marketing for agents’ listings.
Centralized marketing not only takes a task off agents’ plates, it also lets the company provide a consistent level of quality and negotiate lower rates.
Some agents simply aren’t willing to entertain the idea of a lower split, he acknowledges. But savvy agents realize that if they spend less time marketing listings and more time prospecting and selling, they can ultimately make more money.
"Our agents are making dramatically more money by aligning with us and allowing us to assist with that process," he says.
More on Jay Phillip Parker’s push back plan appears in the March issue of Real Estate Broker’s Insider newsletter.
Hacking Threat Menaces Real Estate Firms
February 23, 2017
Foreign hackers are targeting home buyers in a down-payment scam that can exact a significant toll.
And real estate firms, with their often-porous cybersecurity practices, enable the scam.
Here’s how it works: A hacker breaks into the email of a real estate brokerage or a title company, then patiently watches the back and forth with a buyer until the moment the buyer is about to make a down payment.
Then the scammer sends a legit-looking email with instructions for wiring the down payment to the seller, perhaps explaining that there has been a last-minute change.
The logos and email signature seem similar to those the buyer has grown accustomed to seeing, except the bank account number is for an offshore institution and the phone number is tweaked by a few digits.
The scam has become common enough that the Federal Trade Commission and the National Association of Realtors warned consumers and agents about the threat.
Details on the scam and the need to tighten cybersecurity policies appear in the February issue of Real Estate Broker’s Insider newsletter.
Small Brokers Turn to Heft of National Systems
February 9, 2017
After 15 years as an independent Realtor, Nick Olson thought he’d never join a franchise.
Why pay the fees and relinquish control to an out-of-state company?
But Olson changed his mind. In late 2016, his 21-agent firm in Fargo, ND, became Coldwell Banker Element Realty.
"I was one of those that said, ‘I will stay independent forever,’" Olson says. "But times change."
Olson was among a wave of independent brokers who opted to join national systems in 2016. It’s difficult to say whether the latest wave of franchise affiliations represents a trend or just part of the usual ebb and flow. But brokers in general say they’re under more pressure than ever to invest in technology, training, and other support services for agents.
"The technology piece is huge," Olson says. "The consumer wants more information. For a small company, it’s just not possible to make the investment in technology."
Details on why and how small brokers are aligning with larger companies appears in the February issue of Real Estate Broker’s Insider newsletter.
Well Defined Roles Boost Sales
January 26, 2017
Sasha Farmer runs a top-producing team in Charlottesville, VA, and she proudly lists all the real estate tasks she eagerly outsources to others.
Farmer doesn’t update her Facebook page, she doesn’t show up for home inspections, and she definitely doesn’t put signs in the yard.
"If you see me installing a sign at your house, something is wrong," Farmer says. "That is not the highest and best use of my time."
Instead, Farmer has established clearly defined roles for her team, which operates at Montague, Miller & Associates.
Her goal is to generate 40 leads a month, and convert eight of those leads into closings.
Her strategy includes sending a glossy hardcopy marketing piece to the seller before the listing appointment. She also asks that sellers fill out a "homework sheet" that includes such documents as floor plan, survey, mortgage balances, and other information.
The idea is to maximize her time at the listing presentation.
"I’m not going to roll into your house and be left in the kitchen while you’re upstairs going through filing cabinets," Farmer says. "If I get to the listing and [the sheet] is already filled out, I know I’ve won that listing."
Details on Farmer’s division of labor appear in the January issue of Real Estate Broker’s Insider newsletter.
Economy Looks Favorable for Housing, But Commission Pressures Remain
January 11, 2017
Home prices are poised to keep climbing in 2017, thanks to rising incomes and a tight supply of homes for sale.
While economic forces seem mostly favorable, real estate brokers are likely to face continued pressure on commissions by consumers, along with increasing demands for more generous splits from agents.
That’s the consensus view of experts interviewed by Real Estate Broker’s Insider for its annual outlook — although it might be wise to note that predicting the future is never an exact science.
"We think housing will begin to march forward in the coming years," says National Association of Realtors Chief Economist Lawrence Yun.
However, it could be a slow march. Zillow forecasts home values to slow to a 3 percent appreciation rate by October 2017, down from a 6 percent pace in 2016.
Many expect a flood of young buyers in 2017. First-time buyers largely disappeared in recent years, but that trend has reversed. After slipping for three straight years, the share of sales to first-time buyers in 2016 ticked up to 35 percent, according to the National Association of Realtors.
"We’re already at a point where the largest group of buyers is millennials," says Svenja Gudell, chief economist at Zillow. "Especially for first-time home buyers, we’re going to see the number of millennials rising."
The full Annual Outlook article is now available online.
Annual Changing of the Guard at Local Realtor Associations Signals Pressing Issues
December 29, 2016
Geoff McIntosh started his career selling sewing machines at Sears. He later owned a restaurant in Idaho.
When he moved into real estate, he finally found a career he wanted to stick with. Three decades later, McIntosh is managing broker at the 186-agent Main Street Realtors in Long Beach, CA, and 2017 president of the California Association of Realtors.
As head of C.A.R., McIntosh will focus on such issues as affordable housing and protecting the independent contractor status of real estate agents.
McIntosh spoke to Real Estate Broker’s Insider about his career, his business philosophy, and his concerns for the future.
"The MLS wars drive me crazy," he says. "We have these little territories, and we’re not going to give up our territories — and yet consumers are looking at Zillow and Realtor.com and have access to more information than we do.
"My fear, is that if some big player outside the industry gets interested in real estate, they could come in and disintermediate us. We’re distracted by the chatter with each other, and we need to figure out how to get along with each other."
More from Geoff McIntosh appears in the December issue of Real Estate Broker’s Insider newsletter.
Avoid Pocket Listings
December 15, 2016
With inventories tight in many parts of the nation, so-called pocket listings remain a popular alternative for a variety of reasons.
But if you allow agents to market listings without using the multiple listing service, you’re inviting legal problems, warns Bill Lublin, chief executive officer of Century 21 Advantage Gold in Philadelphia.
Reflecting the unsavory reputation of pocket listings, off-market listings once were known as "sandbagging," Lublin says. Proponents of the practice cite a number of reasons to use pocket listings, including the seller’s desire to maintain privacy and to not be disrupted by showings of the home, along with using the exclusivity of off-market listings to build buzz.
Lublin considers such rationale "nonsense."
Research shows that homes sell for more when they’re in the MLS, Lublin says — and not listing a home in the MLS opens you and your agents to the possibility of litigation from sellers who say you didn’t fight for the best deal.
If you decide to take an off-market listing, make sure your agent provides the seller with a form that clearly explains the downside of not being in the MLS.
More on pocket listings, buyer love letters, and dealing with difficult appraisals appears in the December issue of Real Estate Broker’s Insider newsletter.
Brokers Cutting Out Buyer Agents
December 1, 2016
Amid a renewed focus on discounted commissions, a new breed of brokers is offering a sharp-elbowed way for sellers to save money.
The strategy: Cut buyers’ agents — and their 3 percent commissions — out of deals.
The December issue of industry newsletter, Real Estate Broker’s Insider, profiles two brokers who are touting savings by cutting out buyer agents.
It’s an approach championed by Added Equity Real Estate of Seattle. "I don’t think sellers need to pay buyer agents any more," says founder Craig Blackmon.
The company’s pitch is that it will charge sellers 2 percent to market a home, with a token commission of just $500 to the buyer’s agent. Blackmon says that sum triggers an agent’s legal duty to show the home to an interested client.
In another unconventional move, Blackmon argues that the MLS is no longer a requirement for marketing homes.
"It’s basic economics: You don’t have to reach every buyer to get fair market value, just a sufficiently large enough pool of buyers," he says.
Blackmon says his listings can receive a large number of buyers through Zillow, Trulia, and Yahoo homes.
"My model wouldn’t be possible without Zillow," he says.
Details on Added Equity and additional business models appear in the December issue of Real Estate Broker’s Insider newsletter.
Brokers Unveil New Discount Models
November 17, 2016
As consumers continue to exert pressure on real estate commissions, non-traditional companies are pitching business models seeking to capitalize on the notion that agents are simply paid too much for their services.
In one example, an Atlanta discount brokerage is expanding aggressively. In another instance, a startup company from New Jersey says it has found a way to facilitate discounts without disrupting an entire industry.
The New Jersey website Less Percent Real Estate touts itself as something of a dating service for bargain hunting sellers and willing agents. Here’s how it works: A seller visits LessPercent.com and anonymously posts details about the listing.
Agents then bid for the seller’s business, primarily based on price. Less Percent Chief Executive Michael Huegel says the typical commission through the site is in "the low 4s."
Agents who win listings through the site pay a flat fee based on the listing price. The fee starts at $299 for homes listed at up to $299,000, and the fee goes up in $100 increments from there.
After starting in New Jersey, Less Percent has expanded to California and Florida.
Huegel notes that he has gotten little resistance from the industry, in part because discounts have become so common.
"This is the new norm," he says. "The industry is changing."
Details on Less Percent Real Estate and additional business models appear in the November issue of Real Estate Broker’s Insider newsletter.
Leader of Fast-Growing Team Uses Old and New Strategies to Drive Expansion
November 4, 2016
The Bob Lucido Team is part of Keller Williams Integrity in Ellicott City, MD, and, in an unusual move for a team, Lucido has been expanding nationally as a business within Keller Williams.
Lucido says his team closed 1,236 deals and generated $10.4 million in gross commission income in 2015.
How has he achieved such stellar growth? Lucido embraces a variety of marketing tactics, using both the latest technology — such as predictive analytics and Facebook ads — and old-school strategies like direct mail, door-knocking and open houses.
One of his signature programs is a guaranteed sale: List with Lucido, and if the house doesn’t sell, he’ll buy it.
Clients who opt for this offering agree to a number of restrictions. The home must be priced at $150,000 to $750,000, and it must not be a unique or remote property.
Lucido must agree to the list price, and every 30 days that the home doesn’t sell, he drops the price by 4 percent.
If he miscalculates and the house doesn’t sell, Lucido buys it — but he insists that the seller pays him a commission and agrees to appear in a testimonial.
In other words, he wants to make sure that he gets something in return for taking on a significant financial risk.
"You have to be prepared to buy a home" Lucido says. However, that’s not the goal. The real goal is to attract potential clients.
Details on other methods Lucido is using to drive growth appear in the November issue of Real Estate Broker’s Insider newsletter.
Pressure on Commissions Continues to Rise
October 20, 2016
Get ready for agents to demand a bigger share of their commissions. Realogy, the nation’s biggest brokerage firm, says it’s being squeezed by that very trend. The company expects its average split to edge up toward 69 percent.
Just as agents are pressuring brokers for more generous splits, consumers increasingly are asking agents to discount their commissions.
Fully 60 percent of people who sold a home in the past year said they got a discount on the commission they paid to their real estate agent, says Seattle-based brokerage Redfin. The average discount was 41 percent off the typical commission.
Among people who bought a home in the past year, 46 percent said their agent gave them a refund, rebate, closing cost contribution, or other form of savings worth more than $100, with the average discount totaling $3,693.
Details on commission trends appear in the October issue of Real Estate Broker’s Insider newsletter.
Free Trips, Profit Sharing Among Broker’s Strategies for Keeping Agents Happy
October 7, 2016
This year, Dallas broker Jim Fite paid for 91 of his agents and employees to fly to Mexico and stay at an all-inclusive resort. Lodging, food, and drinks were covered by Century 21 Judge Fite Co.
Fite figures he spent about $2,000 a person, or nearly $200,000, on his annual "Passport to Paradise" program. Next year’s trip is scheduled for Panama, and Fite hopes to send more than 100 people from his company of 850 agents and employees.
The result, Fite says, is that in an industry known for turnover, he has won uncommon loyalty from agents and managers.
Fite began the Passport to Paradise program more than a decade ago. Agents who win the trip bond with other agents during the trip, and they return motivated to repeat the process.
"Once they win, they work hard to win again," Fite says.
Details on the Passport to Paradise program and more strategies for keeping agents happy, appear in the October issue of Real Estate Broker’s Insider.
Broker Abandons Internet Team
September 22, 2016
Like many companies, Lang Realty has struggled to manage the Internet leads that are both crucial and confounding. On the one hand, leads pour forth: Lang Realty gets thousands of prospects visiting its site every month.
On the other hand, Broker Scott Agran freely acknowledges that most Internet leads are "awful," and that only 2 percent ever result in a sale.
For a time, Lang Realty of Boca Raton, FL, had a dedicated team that was devoted to incubating Internet prospects. The idea was that successful agents already had pipelines full of repeat customers and referrals and didn’t want to chase Internet leads that pan out only one time in 50.
But the statistics proved too daunting even for a dedicated Internet team. In his latest attempt to make sure Internet leads aren’t ignored, Agran says he applied the principles of old-fashioned floor time to the still-new challenge of courting online shoppers.
Now, a consumer gets several free views of listings on Lang Realty’s website before he’s prompted to register. Then, the lead is distributed to what Agran calls a "round robin" of agents.
From there, it’s up to the potential buyer to decide which Lang Realty agent to hire.
All the details on Agran’s "round robin" approach appear in the September issue of Real Estate Broker’s Insider.
Some Venerable Franchise Systems Are Shrinking
September 8, 2016
Franchise systems such as HomeServices of America, Better Homes and Gardens, and Keller Williams have expanded aggressively in recent years. RE/MAX and Coldwell Banker have held their market share, and firms such as ERA have moved to reinvigorate themselves.
Alas, the real estate market seems not to have room for every national system. Forbes magazine singled out three real estate franchise systems as bad bets based on their declining fortunes in recent years:
• Help-U-Sell Real Estate. The discounter has been around since 1976, but it’s fading fast. According to Entrepreneur.com, Help-U-Sell has shrunk from more than 800 locations to fewer than 100 franchises over the past decade.
• Realty World. Another old-school company that has been shrinking, Realty World was founded in 1973. While it maintains a strong presence in such areas as Florida, North Carolina, and Southern California, it has been shrinking. Forbes puts Realty World’s five-year growth rate at -18 percent. The company’s website lists 115 offices, down from 700 in 2005.
• Exit Realty. Forbes reports a five-year growth rate of -8 percent. Exit Realty has 463 units, down from 630 in 2005.
Forbes also noted that Century 21 and Windermere Real Estate have seen single-digit declines in growth over the past five years.
More on the status of franchise systems appears in the August issue of Real Estate Broker’s Insider along with Jack O’Connor’s approach to tight inventories, and Mel Wilson’s techniques for recruiting and training young agents.
Dealing with Tight Inventories?
August 17, 2016
Tight inventories and bidding wars aren’t just for hot housing markets any more. The supply of homes for sale has grown tight in much of the country, a dearth driven by the combination of rock-bottom mortgage rates, a recovering job market, and a lack of new construction.
Jack O’Connor, broker-owner of The Denver 100, says old-school hustle and wowing customers with high-end service can help.
O’Conner’s agents sweeten the pot by offering a variety of services. The agent pays for a cleaning crew to spruce up new listings, for instance. And the company coordinates moves for sellers.
"We provide an enhanced services package that far exceeds what a normal broker would provide," O’Connor says.
That sort of high-end service helps set his company apart and generates referrals, O’Connor says.
Amid the intense competition for listings, he adds, some Denver agents who have buyers in hand have begun to offer their listing services for free.
More on Jack O’Connor’s approach to tight inventories, plus Mel Wilson’s techniques for recruiting and training young agents appear in the August issue of Real Estate Broker’s Insider.
Recruiting Young Agents — Tips From the Field
August 3, 2016
Los Angeles broker Mel Wilson can’t help noticing the graying of the agents in his office. Wilson runs the 38-agent Mel Wilson & Associates, and he fears that the aging of the agent population imperils an entire industry.
Wilson, who’s in his early 60s himself, has tried to spur a youth movement at his company. He has been actively recruiting at California State University Northridge.
During his recruiting visits to campus, Wilson has found that few college students are eager to jump into careers in real estate.
"It’s not their first choice," he says.
But Wilson tries to change the perception. Among his selling points are a flexible schedule, good compensation, and being your own boss.
Wilson stresses work-life balance, telling students they can take a month off to backpack through Europe if they want.
"Unlike us oldsters, they still know how to have fun," Wilson says.
The age-old dilemma for new agents, of course, is that rookies might not cash a commission check for months. Because many new graduates have student loans and living expenses, a commission-only existence might not work for them.
Wilson has an answer to that: He offers millennial agents part-time jobs. He pays his fresh recruits $12 an hour to handle administrative tasks, set appointments, or run social media campaigns. In that manner, the new agents can bring in a modest income while also learning the business.
Meanwhile, Wilson offers hands-on training. He takes rookies to look at houses and gives them homework assignments that might involve researching property values.
More on Mel Wilson’s approach to recruiting and training young agents appears in the August issue of Real Estate Broker’s Insider.
Listing Platform Aims to Save Time and Money
July 19, 2016
In June, five multiple listing services and 13 real estate companies began testing UpstreamRE, a listing system that promises to achieve two ambitious goals — to revolutionize property data, and to mute disputes between brokers and Zillow.
The National Association of Realtors has invested $6 million in Upstream, and the initiative so far has been overseen by a coalition that includes NAR, HomeServices of America, and Leading Real Estate Companies of the World, among other organizations.
The ultimate goal is that all of the nation’s 700-plus MLSs will be on the system. Craig Cheatham, interim CEO of Upstream, likens the project to the construction of the interstate highway system — and he hopes the work goes smoothly enough to attract little notice. "Upstream is trying to be behind the scenes, something you don’t really notice," he says.
Just as interstates standardized travel for vehicles, Upstream hopes to create just one format nationwide, instead of hundreds of databases and data layouts.
For brokers, Upstream, eliminates the need to store the same listing data in different formats. And standardization could save time and money.
More about UpstreamRE appears in the July issue of Real Estate Broker’s Insider along with data on falling pay for Realtors and more.
Changing of the guard at your company?
Start early, this broker says
July 5, 2016
Tom DeWine has spent years preparing to take over his father’s Texas brokerage, yet he still wishes he had more time.
Call it the curse of succession planning: No matter how precisely the parties lay out their plans, it’s not an easy process. As many brokers reach retirement age, succession planning is a fraught decision, and a common struggle.
"In some other language, succession probably means ‘incredibly challenging and uncomfortably difficult,’" DeWine jokes.
DeWine is president and chief operating officer of ERA Colonial Real Estate. He plans to assume control of the company when his father, Dennis DeWine, retires in 2017.
The senior DeWine offers one bit of advice (with the caveat that it does not apply to him but to other parent-to-child passings of the mantel): If you plan to someday give the company to Junior, don’t gripe openly in the office about the time he got kicked out of school for smoking pot, or some other teenage transgression.
"There is often a dynamic of the successor being a known quantity," DeWine says. "You did something in high school that was stupid, and everyone heard about it."
A child taking over a father’s company often has to work twice as hard to prove himself in the ranks. A reputation as a spoiled child is something that’s tough to shed, especially if your company has long-tenured agents.
"I’ve seen it literally take the legs out of a succession plan," DeWine says.
More about the DeWines’ experience, as well as data on falling pay for Realtors, and insights into the UpstreamRE listing system appear in the July issue of Real Estate Broker’s Insider.
Broker Experiments with Hourly Fee
June 21, 2016
Chicago broker Gary Lucido says consumers could save big bucks if they were willing to pay their agents by the hour.
Lucido is president of Lucid Realty, a small firm that offers discounted commissions to sellers, rebates to buyers, and hourly fees to anyone who’s bold enough to try them.
For the handful of consumers who recognize the value of paying by the hour, Lucid Realty charges $125 an hour. The buyer agrees to put up a $1,000 retainer. After Lucido has devoted seven or eight hours to the client, the company asks for more money.
Lucido shares his time log so the buyer can see exactly how Lucido is spending his time.
"For the right person, this could save them a lot of money," Lucido says. "The kind of person who chooses to go hourly knows what they want."
Lucido says the hourly arrangement is especially favorable for buyers of high-end properties.
In the case of a $1 million sale, with Lucid Realty representing the buyer and collecting a 2.5 percent commission, the company’s payday would be $25,000. If Lucido devotes 40 hours to the deal at $125 an hour, he keeps $5,000 in hourly fees and rebates the $20,000 difference to the client.
The concept of hourly fees isn’t new. Brokers have been talking for years about changing the way they charge for their services, but the traditional commission model has proven resilient.
"The consumer is highly irrational," Lucido says. "People are very risk-averse. There’s this fear, and they end up paying dearly."
More on Lucido’s experience with hourly fees, plus a peek at fast-growing 100-percent companies and realtor association revenue appear in the June issue of Real Estate Broker’s Insider.
Realtor Association Revenue and Executive Compensation on the rise
June 7, 2016
The nation’s 60 largest Realtor organizations pulled in more than half a billion dollars in revenue in 2014, and they paid their CEOs more than $20 million.
That’s according to Real Estate Broker’s Insider analysis of tax returns filed by national, state, and regional associations. (Most organizations’ 2014 returns were made public this spring.)
The rising fortunes of Realtor associations underscore a paradox in the real estate industry. On the one hand, the housing market is recovering, and Realtors remain loyal to their local, state, and national associations. Member support is underscored by bustling attendance at Realtor conferences and generous contributions to political action committees.
On the other hand, brokers and agents complain constantly about profit pressures, relentless competition, and the cost of keeping pace with new technology — even as their dues support several layers of associations.
For instance, a Chicago agent who is a member of the local, state, and national associations would contribute to the $337,105 salary of the CEO of the Chicago Association of Realtors, plus the $1.4 million salary of the head of the Illinois Association of Realtors and the $1.6 million salary of NAR’s CEO.
A breakdown of the top associations by revenue and of executive compensation appear in the June issue of Real Estate Broker’s Insider.
Brokers Say Online Testimonials Are Scary at First, Useful in the Long Run
May 24, 2016
Like many brokers, Joe Horning was intrigued by the idea of publishing clients’ Yelp- style reviews of agents.
But he was scared of the potential backlash.
"I was worried about negative testimonials coming in," says Horning, head of Shorewest Realtors in Milwaukee.
As it turns out, Horning had no reason to worry. After he began publishing customer feedback online, his agents received near-perfect grades.
Shorewest uses third-party software to collect reviews from clients. The system lets consumers rank agents’ performance from one to five stars. If a consumer picks four or five stars, the software asks for a "testimonial." For consumers who give three or fewer, the software asks for "feedback."
Intriguingly, Horning says, clients rarely express tepid feelings about their agents. Buyers and sellers either love their agents and give them a five or hate them and rate them a one.
Low scores often involve factors outside of agents’ control, such as being out-bid by a higher offer, but Horning says he discusses all poor ratings with agents.
More about Horning’s experience implementing online testimonials as well as articles on low-down loans, the looming housing shortage, and using an Internet-Team appear in the May issue of Real Estate Broker’s Insider.
Low-Down Loans: An Untapped Resource for
May 10, 2016
In the first few months of 2016, RE/MAX agent Jason Lande closed some 30 deals with cash-strapped first-time buyers.
His secret? Lande tapped a state of Florida program that provides down payment assistance to first-time buyers.
Learning to navigate the down payment program has been a boon to his business, says Lande, an agent at RE/MAX Aerospace in Rockledge, FL.
The program is just one example of the sometimes-generous down payment assistance programs offered by cities, states, and nonprofits nationwide. The wealth of initiatives is helping homebuyers overcome tight lending standards and buy properties they might not otherwise be able to afford.
One lesson Lande learned early on: Do your homework about down payment assistance programs before you start pitching them. Nothing sabotages client-agent goodwill like a buyer learning she doesn’t qualify for a sweet deal after an agent talks it up.
Details on several first-time-buyer programs, plus state-by-state resources appear in the May issue of Real Estate Broker’s Insider.
Broker’s In-House Interior Design Studio Boosts Business
April 26, 2016
Broker Karen Hall discovered a unique way to lure clients to her brokerage — and to protect commissions from an ever-tightening squeeze.
Hall’s 14-agent @home Real Estate in Alexandria, VA, operates a 950-square-foot design studio. Through a partnership with a remodeling company, @home agents walk buyers and sellers through the costs of various renovation projects.
"It usually comes down to two houses, and one needs a kitchen renovation and the other needs a basement remodel," Hall says. "That’s like comparing apples to watermelons. We can get this quickly to a buyer before they make an offer. It’s an opportunity for us to be of value."
@home offers the design services to clients for free. The payback, Hall says, is that clients are more willing to pay full commission to a full-service company.
"The agents thoroughly enjoy it, and we’ve got it all here in one place," she says.
See photos of the @home office and design studio.
More ideas on beating the commission squeeze, appear in the April issue of Real Estate Broker’s Insider.
Commission Rates Fall to Record Lows
April 12, 2016
Commission rates fell in 2015 to their lowest level on record, at least by one measure.
That’s according to Real Estate Broker’s Insider’s analysis of regulatory filings by Realogy Corp., the nation’s largest broker.
At Realogy’s company-owned operations — mainly Coldwell Banker brokerages in large markets with relatively high home prices — the average commission rate was 2.46 percent in 2015. That’s down from the previous low of 2.47 percent, reached in 2007 and 2014.
Brokers are reluctant to discuss commissions for fear of running afoul of anti-trust laws, but perhaps the industry has entered an era when falling commission rates are the price to pay for a healthy real estate market. Commissions declined sharply during the housing boom of a decade ago. Realogy franchisees collected 2.65 percent per side in 2002, a number that fell to 2.47 percent in 2006.
The conventional wisdom held that commission rates dipped during the boom for a number of reasons, including rising home prices, savvier consumers, a flood of new agents competing for business, and pressure from a new breed of discounters. Commissions rose from 2007 through 2009 as prices fell and consumers recognized the value of professional marketing.
Now that the market has recovered and home values have reached new highs, commissions are falling.
Detailed analysis of the impact of rising prices and falling commission rates appears in the April issue of Real Estate Broker’s Insider.
Subprime Loans: They’re Baaaack
March 29, 2016
The liar loans of a decade ago are gone, but subprime mortgages are gradually returning, according to credit reporting agency Equifax.
In the first 10 months of 2015, there were 312,000 new subprime mortgages originated for a total of $50.7 billion, Equifax says. That’s a 45 percent increase in total balances from the previous year.
Equifax defines a subprime borrower as a homeowner with an Equifax Risk Score of 620 or lower.
"Credit standards are becoming more accommodating to meet market demand," says Amy Crews Cutts, chief economist at Equifax. "At the same time, lenders are focusing more attention on evaluating consumers’ ability to repay."
Developments in the home-loan market are covered regularly in the pages of Real Estate Broker’s Insider.
Brokers Focus on Expansion
March 15, 2016
For years, most brokers hunkered down and simply tried to survive the worst housing market in decades.
Now, brokers are starting to expand again. With the U.S. economy on the mend and the housing market coming back strong, a few companies are rolling out ambitious expansion plans.
One start-up brokerage has amassed cash from Wall Street and Silicon Valley, has hired a team of software engineers and is opening offices from Florida to California.
Another company aims to replicate a team-based approach that generates leads for agents.
And still another firm is using its mortgage and title muscle to support an expansion of its real estate brokerage.
Each company has its own strategy. For instance, one is investing heavily in bricks and mortar, while another aims to keep its office space lean.
Intriguingly, all three companies are focused on corporate-owned offices rather than franchised locations.
The March issue of Real Estate Broker’s Insider includes interviews with all three companies about their strategies.
Broker Finds Success With Do-It-Yourself Facebook Advertising
March 1, 2016
After using Facebook ads to generate dozens of closed deals, Las Vegas agent Joe Herrera says he has learned two simple lessons about social media marketing.
- First, it works better if you do it yourself.
- And second, don’t be afraid to pimp your listings.
Herrera is co-founder of the Joe Taylor Group, a team that’s part of Simply Vegas Real Estate. He says the team spends $2,000 a month on Facebook ads, an investment that yielded 30 closed deals in 2015 and could generate 60 sales in 2016.
Joe Taylor Group once tried outsourcing its social media strategy, paying a consultant to author its posts. Herrera says the relationship ended when the company posted this question: "How much do homes in Vegas sell for?"
The query wasn’t posed as part of a quiz or poll. It was an attempt to engage consumers.
"It was the dumbest thing I’ve ever seen," Herrera says. "It would be like a dentist asking the best way to remove a molar."
So Herrera took control of Joe Taylor Group’s Facebook campaign. He advertises a property a day, and he says the aim is to reach potential buyers when they’re not thinking about buying a house.
"We’re catching people in a casual moment," Herrera says. "They’re sitting on their couch surfing Facebook, and they happen to see one of our listings that grabs their attention."
Follow-up is crucial, Herrera says. If someone alerts a Facebook friend to the post, Herrera sends a message to that person asking if they want more information. About 20 percent of the time, that prospect will respond.
More Facebook tips from Joe Herrera appear in the March issue of Real Estate Broker’s Insider.
Coach Retiring Agents to Sell their Book of Business
February 16, 2016
Chances are your company is filled with graying agents who plan to retire in the near future. If you hope to keep some of their business after they step down, you need to help agents start thinking about succession planning now, says Chandra Hall, owner of Colorado Mesa Realty in Colorado Springs.
Hall notes that the median age of Realtors is 57. Most say they expect to retire in the next 10 years — and many plan to simply walk away from their business with no formal exit plan.
"It’s very scary for our industry," Hall says. "Seemingly overnight, millions of dollars of volume just vanishes."
The alternative is to create a business the retiring agent can sell to a younger agent. The typical sale price for real estate practices is 1.5 times past 12 months’ revenue, Hall says. So if an agent brought in $200,000 in gross commissions, the sale price would be $300,000.
Because the buyer of a business is likely to be an agent who doesn’t have $300,000 lying around for acquisitions, the seller probably will work out an arrangement whereby the buyer repays the seller gradually, from the future revenues created by the seller’s book of business.
That means that once an agent has gussied up the business for sale and found a buyer, the seller’s work isn’t over. To make sure the buyer retains the seller’s clients, it’s wise for agents to stay on for a period of months or years to smooth over the transition.
In the February issue of Real Estate Broker’s Insider, Hall explains how to help agents prepare their business for sale.
Hoping to Hire Agents in the New Year?
February 2, 2016
For the past two years, DeAnn Golden has been hiring agents at a rapid pace.
Golden, a recruiter for Berkshire Hathaway HomeServices Georgia, landed more than 50 agents a year during 2014 and 2015. One of her secrets? Making warm calls.
"I was never someone who liked to cold call as an agent," Golden says. "Likewise, I don’t like to make a recruiting call a cold process." Instead, she seeks out referrals from agents already at her company.
Golden is a successful recruiter in part because she tackles the task in a way she enjoys, says David Knox, a former broker who now works as a coach and speaker.
Too many brokers fail to recruit because they simply don’t like it. Instead, "Treat it as a game." Knox says. "Recruiting really needs to be fun."
Making recruiting a chore is just one common error. Another typical blunder? Immediately shifting into hardsell gear.
"Managers make the same mistake in recruiting interviews that agents make in listing presentations," Knox says.
Instead of launching into a sales pitch during recruiting interviews, you need to focus on asking questions. You want to see if the agent is a fit for your company and culture.
In the February issue of Real Estate Broker’s Insider, Golden and Knox share additional tips for recruiting success.
As First-Time Buyers Continue Disappearing Act, Brokers See Challenge and Opportunity
January 19, 2016
Real estate leaders once saw millennials as the driver of a demographic boom in housing.
After all, the generation outnumbers baby boomers, who are legendary for snapping up homes. But as millennials head into their prime buying years, their effect on the housing market has proven minimal.
Seeing opportunity, some brokers serve this market by educating millennial consumers about home buying, and they’ve invested in technology and young agents who can relate to young buyers.
For example, Howard Hanna Real Estate Services is wooing young buyers with its My First Home campaign, which includes videos that walk buyers through the basics of credit scores, mortgage applications, and down payments.
Details on this program appear in the January issue of Real Estate Broker’s Insider.
Taking a Page from Uber, Broker Offers Open Houses via Smartphone
December 21, 2015
Agents at Marketplace Homes in Detroit don’t conduct home tours in person. Instead, they let buyers into listings remotely, then answer questions via smartphone video.
Marketplace Homes Chief Executive Mike Kalis likens his ZipTours app to ride-sharing service Uber and lodging app Airbnb. ZipTours allows buyers to tour homes nearly on demand, without setting appointments or trying to adapt to an agent’s schedule.
"If someone wants to get in now, they get in," Kalis says. "This allows a seller to have an open house every day."
When a seller lists with the 50-agent Marketplace Homes, the listing agent gives the seller an open house sign. The seller posts the times the house is available for tours. Then, when a buyer wants to see the house, he logs into the ZipTours app.
Kalis says the idea for the app came to him nearly a decade ago, "I put 100,000 miles on my car in the first 12 months [selling]," Kalis says. "You’d drive all the way across town to meet with somebody who wasn’t there."
Details on how the ZipTours app works and its potential to reshape how homes are shown appears in the December issue of Real Estate Broker’s Insider.
Bold Promise: Join my firm, boost your income by $25,000
December 8, 2015
On the strength of an ambitious promise, Jay Macklin has hired more than 100 agents in less than three years.
"I guarantee that they’ll make at least $25,000 more in the next 12 months than they did in the last 12 months, or I’ll pay the difference," says Macklin, owner of RE/MAX Platinum Living in Scottsdale, AZ. "It sounds like a lot, but it’s not."
There’s a catch, of course. Agents must cough up their tax returns so Macklin can verify how much they made before they join his firm. And recruits agree to a makeover of their marketing materials, along with regular coaching sessions.
"I want them to have skin in the game," Macklin says.
That skin includes participating in RE/MAX Platinum Living’s online training program, along with twice-monthly Mastermind meetings.
Details on this program and Macklin’s overall recruiting recipe appear in the December issue of Real Estate Broker’s Insider.
10 Rules for a Successful Brokerage
November 17, 2015
In his new book The Way of the Entrepreneur, William Raveis, chairman and CEO of William Raveis Real Estate, Mortgage and Insurance, shares lessons from his journey to build the largest family owned real estate brokerage company in the Northeast. Raveis’ lessons include:
- Be passionate. "Passion is essential for starting a business, but it’s also essential to who you are as a person," he says.
- Scout talent. "A CEO must always be scouting for talent and involved in the hiring process," Raveis says. "You can’t delegate this, because then it becomes somebody else’s culture and the company something other than what you envisioned."
- Coach and mentor. "You coach and mentor your managers, your teams, and your sales associates, and it’s not an obligation," Raveis says. "It’s an honor that someone would ask you for your advice or help."
- Empower your team. By pushing their people to make decisions and be accountable, effective coaches urge teams to achieve more.
- Walk around. "I learn more by talking to people in the hallways than I do in formal meetings," Raveis says. "I listen, ask questions, and offer advice."
- Say it seven times. Effective communication requires repetition. "If the message isn’t grasped the first time, it must be repeated, not one or two more times but seven more times before it becomes a part of the vernacular of the company," he says.
- Teach and train. "For employees to have a thorough understanding of the business and be accountable for their contributions, you have to teach them and educate them in all aspects of the job — and not just once," Raveis says.
- Embrace change. "You can’t be a sissy," Raveis says. "You can’t be afraid of change."
- Set goals and execute. Raveis aims to constantly build market share, and his strategy focuses on that goal.
- Solve problems. Problems aren’t easy; that’s why they’re called problems. Rely on your passion to push you to find solutions to financial issues or interpersonal problems.
Raveis expands on many of these themes in a wide-ranging interview in the November issue of Real Estate Broker’s Insider.
Agent-Owners Boost Growth
November 3, 2015
As he maps a growth plan for his brokerage, Daryl Owen has begun offering ownership stakes to some of his top-producing agents.
So far, 10 agents at Nationwide Real Estate have decided to invest in the company as it opens new offices in southern California. Owen says the agents must buy into the office; in exchange, they get a chunk of the profits.
Part of his pitch is that Nationwide Real Estate of Buena Park, CA, has grown to 500 agents in just five years. The company reported revenue of $5.6 million in 2014, a 1,500 percent growth rate that placed it No. 300 on the Inc. Magazine list of fast-growing companies.
Another key to Nationwide’s growth has been the recruiting incentive it offers agents. If a Nationwide agent recruits someone from outside the company, the referring agent receives 10 percent of the company dollar generated by the agent he recruited.
Details on Owen’s business model appear in the November issue of Real Estate Broker’s Insider.
Read Your Policy, and 10 Other Things to Know About E&O Coverage
October 21, 2015
Errors and omissions insurance is no one’s idea of a sexy topic, but if you don’t understand your coverage, it could cost you.
That’s why Jamie Moses urges brokers to scrutinize their errors and omissions (E&O) policies.
"Become intimately aware of your policy’s language," says Moses, a Florida attorney who handles real estate litigation.
"Don’t have your insurance broker explain it to you; you need to read it word for word."
In addition, Moses encourages broker/owners to address the question of who pays the deductible.
When a former client threatens litigation and you file an E&O claim, someone has to write the check to the attorney so that you can be properly represented. Is that payment your responsibility or your agents? Most brokers split the costs with agents, Moses says, but it’s important that you have a clear policy that spells out who pays the deductible in the case of a claim.
"When that first claim comes in, you’re going to have a poor-me agent claiming they can’t pay the deductible, even though they just collected a $6,000 commission," she says.
Clear rules will help keep you and your agents on the same team in the event of a suit.
The full article, plus insights from real estate brokerages on the latest Inc. 5000 list of fastest growing companies, appears in the October issue of Real Estate Broker’s Insider.
Broker Finds Success in Outsourcing Agent Recruiting Calls to Third Party
October 6, 2015
Matt Kelly admits that he’s not keen on cold calls, especially when the purpose of the contact is to ask an agent to join his firm.
With 26 agents, Kelly’s Real Living Realty Group in Franklin, MA, isn’t big enough to hire a full-time recruiter. So Kelly settled on a compromise: He hired a third party to make recruiting calls on his behalf.
"It’s a different approach," the oursourcer says. "It catches them off guard."
The rates are not cheap ($6,500 for recruiting efforts that lead the broker to hire two agents, $12,500 for five agents, or $25,000 for 12 agents), but it frees the broker to focus on other things.
And Kelly, who has hired a handful of agents this way, says agents tend to stay at his company long enough that spending $2,500 in recruiting fees is a reasonable deal.
The full article, appears in the September issue of Real Estate Broker’s Insider.
As U.S. Home Prices Set New Record, Brokers Enjoy Return to Good Times
September 15, 2015
After nine years, a mortgage meltdown and a global recession, U.S. home prices finally topped the price record they achieved in 2006.
Nationally, the median existing-home price in June was $236,400, eclipsing the previous price record of $230,400 set in July 2006, according to the National Association of Realtors.
But unlike the frothy days of a decade ago, this boom market feels decidedly muted.
"We’re still seeing a lot of cash buyers," says Brian Arrington, chief executive of Pacific Sotheby’s International Realty in San Diego. "Almost 30 percent of our sales are cash. So that tells me there’s a lot of money sitting on the sidelines."
Even so, the market’s rebound is good news for Arrington and other brokers who persevered through a wrenching downturn.
In the September issue of Real Estate Broker’s Insider, Arrington and other brokers share their growth strategies for another boom. These include:
- Investing in bricks and mortar — but with smaller offices than a decade ago.
- Diversifying among price ranges and adding ancillary services.
- Trying to woo young agents.
The full article, plus many more insights from top broker/owners appears in the September issue of Real Estate Broker’s Insider.
Century 21 Sweeps Top Spots in J.D. Power Survey — Again
August 31, 2015
Repeating last year’s success, Century 21 claimed the four top spots in J.D. Power’s survey of customer satisfaction.
In 2012, Century 21 ranked dead last in the survey. But in 2014 and 2015, Century 21 rated No. 1 in all categories, including first-time buyer, repeat buyer, first-time seller, and repeat seller. J.D. Power ranks companies on a 1,000-point scale based on such factors as the service provided by the agent, the quality of the agent’s office, and the ease of the closing process.
Instructively for brokers, J.D. Power finds client satisfaction is significantly higher when real estate agents emphasize communication with clients.
Among first-time buyers and sellers, satisfaction scores are more than 100 points higher when sellers are kept informed by their agents. Among repeat sellers, the gap was a whopping 217 points higher for clients who receive prompt responses to questions posed to their listing agents.
"Knowing how and when to communicate with customers is essential for real estate companies," says J.D. Power’s Christina Cooley. "To satisfy first-time customers, it is really about holding their hand by keeping them informed at key points throughout the purchase or selling process to ease their anxiety. For repeat customers, satisfaction hinges more on the timeliness of the response by their real estate agent when questions or concerns arise with the process."
More on the survey results, plus details on brokers who are outsourcing agent recruiting calls, appears in the September issue of Real Estate Broker’s Insider.
Perks Help This Broker/Owner Retain Agents
August 19, 2015
At Mirador Real Estate, the company pays for part of agents’ gym fees, bike share program, and health insurance supplements.
The latest perk? The services of a clinical psychologist brought aboard to help agents balance the stresses of a demanding career.
"Over the past decade I’ve learned that real estate agents tend to fall into a pattern of working 24/7 and sacrifice critical balance in their lives," says Karla Saladino, co-founder of Mirador Real Estate.
One important lesson Saladino has learned about perks is to split the cost with agents.
"We find when we just give a free one, they won’t use it," she says. "We want to make sure they use these perks. Otherwise, we’ll spend the money on something else."
More on Mirador Real Estate’s perks appears in the August issue of Real Estate Broker’s Insider.
Real Estate Comeback Brings New Business Models
August 4, 2015
Say you’re buying a home in California or Texas, but you’re not keen on your buyer’s representative making a 3 percent fee.
Would you be willing to pay 1.5 percent to an agent thousands of miles away?
That’s the question Owners.com will answer as it remakes its business model. The company in late June announced a shift away from its roots as a for-sale-by-owner site into a discount brokerage that interacts more closely with the traditional real estate industry.
Owners.com isn’t the only company trying to upend the traditional brokerage business.
Xome of Seattle launched this summer with an online offering that promises consumers a technology-driven buying and selling process. Xome’s approach differs in that it will connect clients with local agents.
Both companies are banking on a new breed of tech-savvy consumers who are willing to take on a more active role in managing their real estate transactions.
More on Xome, Owners.com and other new entries into the field appear in the August issue of Real Estate Broker’s Insider newsletter.
Coach Agents to Help Buyers Navigate the Loan Market
July 21, 2015
Mortgage markets are slowly easing, but the inventory of homes for sale remains tight.
That means plenty of competition among buyers — an uncomfortable reality that also offers up opportunity. If your agents know how to help buyers navigate the mortgage market, they’ll be more likely to close deals.
Gary Weaver of WJ Bradley Mortgage Capital in Los Angeles suggests working with a mortgage expert to create a script or presentation that outlines the basics of the mortgage market — the types of loans and lender requirements for credit scores, down payments, and income.
"A consumer who’s more educated in the process will be a lot easier to work with," Weaver says.
And today, even borrowers with poor credit scores and little cash can qualify for loans.
"You don’t need excellent credit, and you don’t need 20 percent down," says Kathy Cummings of Bank of America in Charlotte, NC.
Details on educating your agents to educate their customers, appear in the July issue of Real Estate Broker’s Insider newsletter.
Broker Finds Success Attracting Younger Agents
July 7, 2015
ERA Shields in Colorado Springs, CO, has created something of a retirement plan for its older agents.
Bill Hurt, head of the 100-agent company, says he was motivated in part by the lack of exit planning that’s common in the industry.
"The agent who’s worked hard over many years to build that client base loses any residual value," he says.
That’s not just a poor exit strategy for the agent. It also exacts a cost on the broker.
Hurt’s solution was a formal program to recruit younger agents, then team them with older agents who want to retire in the near future.
He tells new agents that his company could offer some "green pasture" in the form of client-sharing arrangements with veterans.
Details on Hurt’s recruitment/retirement plan appear in the July issue of Real Estate Broker’s Insider newsletter.
Does it Feel Like Your Customers Are Getting Younger?
June 23, 2015
Think millennials are sitting out the improving housing market? Think again.
The millennial generation — those 20 to 34 — represented the biggest share of recent buyers, according to the 2015 National Association of Realtors Home Buyer and Seller Generational Trends study.
For the second year in a row, NAR’s study found that the largest group of recent buyers was the millennial generation, who made up 32 percent of all buyers (up from 31 percent in 2013).
Boomers (ages 50 to 68) bought 31 percent of homes, while Generation X (35 to 49) bought 27 percent of homes.
The Silent Generation (ages 69 to 89) made up 10 percent of buyers in the past year.
Get ready for a flood of young buyers, says NAR Chief Economist Lawrence Yun. Millennials are entering their prime buying years, and they’ll soon pass boomers in total population.
You may download the full report at realtor.org.
Who’s Making What — CEO Pay Declines
June 9, 2015
The nation’s largest Realtor associations enjoyed continued recovery in 2013, a year when revenue rose 3.6 percent to $464 million.
While the nation’s 40 largest Realtor associations saw revenue growth, they paid their CEOs less. CEO pay fell 5.8 percent in 2013.
In its most extensive annual survey yet, Real Estate Broker’s Insider looked at tax returns filed by 40 large Realtor associations and found that they paid their top executives a combined $14 million in 2013, down from $14.8 million in 2012. Financial statements for 2014 won’t be available until next year.
"To calculate compensation, we counted not just salary and bonus but also retirement benefits and perks reported on the associations’ tax returns," says Editor Jeff Ostrowski.
In some cases, the tax returns divulge eyebrow-raising details. At the Illinois Association of Realtors, for instance, Chief Executive Gary Clayton took a big pay cut in 2013. But his son and three daughters-in-law collected $156,396 in W-2 compensation from the organization,
To see how your state’s CEO faired, see the Real Estate Broker’s Insider interactive graphic.
Should you Ditch Realtor Affiliation to Cut Costs?
May 27, 2015
Ron Roe made waves in 2010, when he decided to end his 500-agent company’s Realtor membership.
Half a decade later, has Roe been haunted by second thoughts? Not at all.
"We haven’t lost any business," Roe says.
In fact, the head of Russell & Jeffcoat Real Estate in Columbia, SC, says he has only grown more convinced that dropping his company’s longstanding Realtor affiliation was the right move.
For all the emphasis that Realtors place on their trademark, most consumers don’t care if an agent is a Realtor, he says.
One of Roe’s competitors came to a different conclusion. ERA Wilder has remained a member of the local, state, and national associations, even though owner Eddie Wilder says ERA does not require him to.
"It’s certainly a personal choice for a broker," Wilder says. "We gain a lot of value from it. The National Association of Realtors has a strong voice."
More on Ron Roe’s decision to leave NAR and its impact on his business appear in the June issue of Real Estate Broker’s Insider.
Brokers Continue to Pinch Pennies
May 13, 2015
The real estate market has returned to health, but many brokers, chastened by the depth of the Great Recession, continue to pinch pennies.
Real Estate Broker’s Insider asked three brokers about the lessons they learned from the Great Recession, and how they’re applying them to their companies during the recovery.
Jim Imhoff, chairman and chief executive of the 1,350-agent First Weber, has placed a higher priority on cost containment over the past seven years.
He has cast a keen eye on the cost of his offices. In one case, he combined two offices that totaled 13,000 square feet into one 5,500-square-foot location.
And in smaller markets, Imhoff has introduced a hub-and-spoke model that uses tiny offices to serve small towns.
In some cases, he says, First Weber can operate an office for as little as $200 a month, so long as it’s a small space with no staff. The location gets management and support from another, bigger office in a nearby town.
Imhoff has also been looking closely at the leases on his offices. In some cases, he found that annual cost-of-living increases favored landlords and pushed his rent to above-market levels, he has been renegotiating his contracts.
"I’ve been passionate about resetting leases," he says.
More on brokers cost-cutting moves appear in the May issue of Real Estate Broker’s Insider.
Brokers Investing in Bigger Offices
April 29, 2015
In another sign that bricks-and-mortar offices are making a comeback, First Team Real Estate recently opened a shiny new office in Anaheim Hills, CA.
The new 9,200-square-foot office replaces a 4,000-square-foot space. Because the company boasts double-digit market share in Anaheim Hills, investing in an office made sense, says spokesman Jeff Gibson.
"It communicates commitment to our buyers and sellers," he adds. "There’s a great premium buyers and sellers place on being able to see your business, and how you operate. This is the biggest purchase most people make; they’re not trying to buy kids toys off of craigslist."
The goal is also to impress clients with the company’s investment in technology. "You’re sitting in a comfortable leather chair, and you’ve got a latte, and you’re looking at properties on a high-definition screen," Gibson says.
He acknowledged there isn’t a desk for every one of the 102 agents who work from the Anaheim Hills office, but he says the space is none the less impressive to clients and agents.
More on office space, succession planning, and commission rates, appears in the April issue of Real Estate Broker’s Insider.
Keeping the Brokerage in the Family
April 14, 2015
Many brokers like the idea that the company they’ve built will keep going strong into the future. Of course, that’s easier said than done, particularly if the goal is to keep the company in the family.
In the April issue of Real Estate Broker’s Insider management expert Noel Tichy offers four suggestions for getting your kids interested in the family business, and making sure you don’t set them up for failure.
1. Model enthusiasm. Talk about the company around the dinner table. Create internships for your kids so they can learn about your brokerage.
2. Don’t make it easy. Let the kids know they’ll have to earn a spot in the family company.
3. Keep it real — and let them fail. If Junior comes to work for you, make sure it’s in a legit position with real responsibilities — and risk of failure. These "crucible experiences" are the best way to test your children.
4. Encourage honest feedback. Give non-family members assurances that they can give honest, critical assessments about your child’s performance.
More from Tichy and from two successful second-generation broker-owners appears in the April issue of Real Estate Broker’s Insider.
Lead Management is Key to Success
April 1, 2015
Charlie Young, head of ERA Real Estate sees lead management as the key to future success.
In an interview in the March issue of Real Estate Broker’s Insider Young coveres a range of topics from his principles for success to his most fearless predictions for the future of the industry.
"Those people who figure out how to capitalize on lead management and conversion will gain the most market share," he says. "The old rules of longevity in the marketplace and the sphere of influence the agent has built will not have as much influence in the future. The person who can figure out how to capture, cultivate and ultimately close a lead will prevail."
"That’s not a fearless prediction," he continues, "because it’s been in front of our face for a while now. But for years it was more conceptual. Now, as we move into the era of Big Data, we have the tools to make it a reality."
The full article, along with many more insights from Charlie Young appears in the March issue of Real Estate Broker’s Insider.
Wooing Top Producers
March 19, 2015
If you’re trying to woo another broker’s top producer, your pitch must stroke the agent’s ego.
That’s among the advice experts offer brokers in the March issue of Real Estate Broker’s Insider.
Three trainers who teach recruiting courses for the Council of Real Estate Brokerage Managers share tips for recruiting agents at all stages of their careers including the special issues involved in wooing a top-producer.
If you set your sights high and aim to land a top producer from another firm, expect to spend up to 18 months on the recruiting process, says Pat Strong of Pat Strong Realty in Tarpley, TX.
"It’s like a courtship," Strong says. "If they’re a heavy hitter, they’re very entrenched in their company."
Once you target a top producer, make contact once or twice a month. More frequent contact becomes annoying, less frequent attempts are easily forgotten.
"You don’t want to do too much, nor too little," Strong says.
The theme should be stroking the agent’s ego. If the producer closes a big deal or wins an award, send a note of congratulations. If the agent’s child wins an award for youth sports, send a note of congratulations for that, too.
"The way to a heavy hitter’s heart is through their ego," Strong says. "Because they’re tops, they’re ego-driven. When you play to their ego and their broker doesn’t, you win in the long run."
The full article, along with many more insights into recruiting agents at every level, appears in the March issue of Real Estate Broker’s Insider.
Building Agent Teams for the Long-Term
March 3, 2015
With real estate teams all the rage, savvy brokers are learning how to coach successful agents through the process of building a multi-person sales operation.
A strong team can work well for everyone — the broker, team leader, agents and staff. But many brokers are concerned about teaching their best agents everything they need to know in order to go out on their own.
In the March issue of Real Estate Broker's Insider, Pam Ermen, managing broker of The Real Estate Group in Virginia Beach, VA, walks brokers through a six-step process to help their agents build strong teams that will stay in place.
The secret: Stress the services you bring to the table.
If the team leader knows you can help him build and run his team, you’ll have better luck keeping him in your company.
The full article, along with insights from an agent who stayed and an agent who left, appear in the March issue of Real Estate Broker's Insider. Subscribe today.
Landing Listings in a Sellers Market
February 24, 2015
Inventory is tight in much of the nation, creating what real estate coach Bruce Gardner calls a raging seller’s market.
That means listings are at a premium — and if your agents learn how to land listings, theyll do well.
In the February issue of Real Estate Broker's Insider, Gardner offers seven strategies for landing listings in a sellers market.
Part of the reason there are so few homes on the market, Gardner says, is that potential sellers don't realize how much demand there is for homes. Or perhaps they think their home's value is still stuck in 2011. Part of your strategy must be education, says Gardner.
He also advises working your sphere of influence. Gardner calls this the simplest, most direct way to unlock listings.
In the newsletter, he recalls coaching an agent who struggled during 2011, posting his worst year ever. For 2012, the agent resolved to mine his database and call five people every day, five days a week. He managed to make the calls only two to three days a week, but that was plenty.
The result? 2012 was his best year ever.
But if your agents are scared to pick up the phone, Gardner suggests leaning for conversational cues on FORD, an acronym for family, occupation, recreation, and dreams.
Another way to reconnect: Create automated valuation reports for your past clients. This is a report about the person’s home, which means owners are likely to read it.
All seven strategies and more appear in the February issue of Real Estate Broker's Insider. Subscribe today.
Time to Reinvest in Bricks and Mortar?
February 10, 2015
After the real estate bust, brokers everywhere scrambled to slash their bricks-and-mortar costs. Now, though, some brokers are reversing course and investing in office space.
Consider Andrew Duncan, broker-owner of RE/MAX Dynamic in Tampa, FL. He recently expanded his main office by buying an 8,000-square-foot building on a busy street.
We just feel its a better model for us to grow our company, Duncan says. Essentially, I disagree with the approach of telling everybody to work from home.
In the February issue of Real Estate Broker's Insider three successful broker/owners explain why they are expanding their brick and mortar footprints. Among their reasons:
- The office is a place to build company culture.
- Collaboration is popular with younger agents.
- Agents will be safer if they meet new clients at the office.
More from Duncan and others appears in the February issue of Real Estate Broker's Insider. Subscribe today.
Tight Mortgage Standards will Ease in 2015
January 27, 2015
Chris Polychron took over as president of the National Association of Realtors in November, among his many priorities is urging regulators and lenders to open up the flow of mortgages.
Polychron, is executive broker at First Choice Realty in Hot Springs, AR, but he says his main role is as an agent.
A former broker-owner, he sold his company in 2007. It was good timing on my part, Polychron says. Unfortunately, I sold my name, too — they still have it up on their sign.
Real Estate Broker's Insider spoke to Polychron about his career, business philosophy, and predictions for the future.
Overall he sees continued improvement noting:
I think our market is going to do better next year. Our sales are up again for the second month in a row, unexpectedly. Our industry is going to do better as regulators loosen up on lending standards. Theyre giving banks confidence instead of fear to go after some of the loans. You can go too far, and now theyre coming back to the middle. Thats going to be good for lenders, good for Realtors, but most importantly good for consumers.
More from Chris Polychron appears in the January issue of Real Estate Broker's Insider. Subscribe today.
Success Strategy for 2015: Focus on Management
January 14, 2015
The next big thing in real estate success isnt new at all, says real estate coach Matthew Ferrara. In fact, its older than the industry itself.
Management, says Ferrara, is an unappreciated but crucial ingredient for success.
Salespeople are not self-managing, Ferrara says. Management isnt just an afterthought. Its the only thought that high-performing organizations have every day.
Training, coaching, holding agents accountable — none of those all-important tasks will be replaced by software, social media, or listing aggregators.
For decades weve put money, time, marketing, and hope into sales tools, marketing technologies, the cloud, he says. All helpful, but none are up to the task of telling us the right thing to do.
For a monthly dose of real estate agency management ideas and inspiration, subscribe to Real Estate Broker's Insider.
Subscription details are online at: www.BrokersInsider.com/rebi.php
Will 2015 be the Year Sales Finally Pick Up?
December 30, 2014
National Association of Realtors Chief Economist Lawrence Yun admits he was wrong when he predicted an uptick in home sales for 2014.
NAR expects only 4.9 million sales in 2014, slightly below 2013 levels. But Yun says sales volumes will accelerate to 5.3 million in 2015 and 5.4 million in 2016.
The improving job market has consumers feeling more confident, and the rebound in home prices is building household wealth for homeowners and giving them the ability to sell after waiting the last few years, Yun says.
He expects the national median existing-home price to rise 4 percent both next year and in 2016.
Yun says tight credit standards and student debt contributed to a decrease in first-time buyers to a low not seen since 1987.
More on increases in home ownership and decreases in underwater properties appears in the December issue of Real Estate Broker's Insider. Subscribe today.
Video: An Essential Part of Your Marketing Mix
December 18, 2014
Whether youre trying to generate attention for listings or recruit agents, John Mayfield, broker at Mayfield Real Estate, recommends video.
At the center of his marketing program is a fully featured, content rich website. And much of that content is in the form of videos.
The best content is unique and fun, Mayfield says. Video is an effective tool for providing that content and distinguishing yourself and your site -- and fortunately, you need not spend a lot of time or money to create it.
He sprinkles videos throughout his site. For instance, the most-visited page on your site could well be the About Us page. Instead of just using words on that page, he suggests posting a video instead.
If you’re recruiting new agents, he suggests creating video testimonials from your current agents. Each agent needs to deliver just two or three lines. A 45-second clip is a powerful tool, Mayfield says.
Click the images at right to see some of our favorite videos.
More on agency marketing, homeownership rates, and disclosure issues appear in the December issue of Real Estate Broker's Insider. Subscribe today.
What do Falling Homeownership Rates Mean for Industry?
December 4, 2014
The U.S. homeownership rate has fallen to its lowest point in nearly two decades, reflecting both the hangover from the housing bubble and a shift in how younger Americans view homeownership.
So what does the future hold? Its a crucial question for an industry that relies on new generations of buyers to snap up starter homes, then graduate to move-up homes, and later downsize to empty-nester homes.
Surveys of renters consistently show 70, 80 percent of renters want to be homeowners, says Lawrence Yun, chief economist at the National Association of Realtors. Perhaps the timing is not right, because they dont have the necessary credit scores or finances for down payments.
Others say the stats tell a different story. The share of first- time buyers has dropped to a third, the lowest level since the early 1980s. That marks a slowing of the decades-long trend of new buyers eagerly entering the market.
Whats more, sales volumes remain well off their boomtime peak of more than 6 million homes a year. Yun says the number of renter households in the United States has increased by 4 million since 2010, while homeowner households have decreased by 1 million.
Ken Johnson, a former real estate broker and now a real estate economist at Florida Atlantic University, predicts the home ownership rate will fall to 55 percent in the coming years. If that forecast comes true, it would mark a return to the housing market of 1950, when the U.S. homeownership rate stood at 55 percent.
A full report on homeownership rates appears in the December issue of Real Estate Broker's Insider along with the new rules of real estate marketing and information on disclosure issues arising from marijuana legalization. Subscribe today.
Broker/Owners Identify Challenges, Promising Trends
November 20, 2014
The most recent National Association of Realtors industry profile provides a unique view of todays real estate firms and insights into concerns and promising trends.
The industry remains a fiercely independent business dominated by mom-and-pop firms. Eighty-one percent of all brokerages have one office and two full-time real estate licensees. Only seven percent of companies have four or more offices with 92 full-time real estate licensees.
The typical residential real estate firms brokerage sales volume was $4.7 million in 2013. Firms reported that 35 percent of their sales volume typically comes from past client referrals, 30 percent from repeat business from past clients, 10 percent from their website, and five percent through social media.
The concern most cited by brokers: Millennials inability to buy a home because of stagnant wage growth, a slow job market, and high debt-to-income ratios.
Other oft-cited challenges: Profitability, keeping up with technology, maintaining sufficient inventory, and local or regional economic conditions.
Such worries aside, 54 percent of firms reported they are recruiting sales agents, with 87 percent of those firms reporting business growth as their primary reason for recruiting.
More from the report appears in the November issue of Real Estate Broker's Insider along with advice on keeping agents safe, working with Zillow, Trulia and Realtor.com, and a new business model that will sound familiar to veteran brokers. Subscribe today.
Agent Murder Underscores the Overlooked Basics
November 6, 2014
The murder of an Arkansas agent was as predictable as it was tragic: A paroled felon made an appointment to meet Beverly Carter, a photogenic wife and mother, at a vacant home in a rural area.
The man killed her, a crime that set off a new round of safety consciousness among brokers and agents. Asked by reporters why he targeted Carter, the accused murderer said, Because she was just a woman that worked alone — a rich broker.
Safety expert Robert Siciliano says hes shocked that brokers havent required agents to take tougher security measures — and that agents still agree to meet complete strangers at vacant homes.
As a broker, its up to you to establish a security protocol: When an agent meets a new prospect, the agent needs to make a copy of the potential buyers drivers license before going anywhere with the potential client.
Realtors come up with all these excuses not to do what I tell them they should do, Siciliano says. Do you think they care about offending you at the airport, or at a federal building? Its protocol.
Legitimate buyers know theyll have to provide reams of personal information to qualify for a loan, so a request for ID is unlikely to faze them. But bad guys might think twice.
Additional tips from Siciliano appear in the November issue of Real Estate Broker's Insider. Subscribe today.
Time for New Blood at Your Company?
October 23, 2014
For decades, the real estate industry has faced a generation gap: The typical agent is old enough to be the parent of the typical buyer.
Its a gap that stubbornly refuses to close. But Millennials (the huge demographic group born roughly between 1980 and 2000) are entering their prime buying years, and brokers covet young agents who can connect with their peers.
CompensationMaster, a real estate consulting firm, offers readers 12 strategies for luring Gen Y agents to your company, including:
- Embrace social networking. Millennials love to blog, and they build enormous spheres through Facebook, Twitter, Instagram, and other sites. To bring in more young agents for recruiting appointments, optimize social networks, and create a blog on your website, specifically one dedicated to recruiting.
- Recruit at colleges. Register with your local colleges and universities and be a strong presence on their job boards. Offer to hold career nights for graduates. Friendship is such a strong motivator for Millennials that they might choose a job just to be with their friends.
- Tout freedom. Millennials want the freedom to come and go as they please, which makes them an excellent fit for the real estate industry.
- Boast belonging. Give Millennials a sense of belonging to something bigger than themselves, to something they can believe in. A strong brand and mission will help.
Additional tips from David Cocks of Compensation Master appear in the October issue of Real Estate Broker's Insider. Subscribe today.
Moving into Property Management
October 10, 2014
NRT, a division of Realogy Holdings, this summer bought a large property manager in Texas and formed a national operation to handle rentals.
NRTs Ryan Gorman stresses the synergies created by operating both a brokerage firm and a property management firm.
Ideally, the property management firm is talking to tenants and, when theyre ready to buy, can point them to NRT agents, he suggests.
Sales agents, meanwhile, meet move-up buyers who want to keep their old house as a rental.
But Jack Meeks, who runs a brokerage and a property management firm in Florida cautions that the sales and rental businesses are so different that its rare for one agent to handle both types of transactions. Meeks split his property management firm into a separate company operated from its own office.
There is a connection, but not one you can over-emphasize, Meeks says.
The reason companies like NRT want to get into property management is that very large hedge fund investors are buying hundreds and hundreds of properties, then turning them over to companies to manage.
For smaller brokers branching into property management, Meeks offers this advice: Its not a bad business, but expect to earn your money.
More on property management, attracting younger agents, and a low-cost way to offer agents health insurance appear in the October issue of Real Estate Broker's Insider. Subscribe today.
NAR Urges Agents to Push Back Against Zillow And Trulia
September 25, 2014
Even before they announced their proposed marriage, Zillow and Trulia were considered a menace by many brokers and agents.
Now that the online listing aggregators are set to combine into one company, the level of angst has moved higher.
Soon after Zillow and Trulia announced their merger, the National Association of Realtors issued advice for agents concerned about aggregators growing power.
The letter, signed by NAR President Steve Brown and Chief Executive Dale Stinton, didn’t name Zillow or Trulia, although it did mention Realtor.com.
Stinton and Brown note that, just as data does not define us, nor should we allow service providers to become too comfortable in defining how you conduct your business. They suggest the following steps:
- Demand the brokers and the listing agents identity be prominently displayed.
- Demand timely, fresh listing display.
- Do not allow your listings to be modified.
- Do not allow co-mingling of your listings with FSBOs.
- Demand preservation of copyright notices on your listings.
- Demand that your provider highlight and promote the term Realtor.
- AND — NEVER, EVER let any provider threaten your commission!
More on the Zillow/Trulia merger, customer self-service tools, and drones appears in the September issue of Real Estate Broker's Insider. Subscribe today.
Self-Service Tools Improve Customer Satisfaction
September 12, 2014
In a worst-to-first turn-around, Century 21 swept all four top spots in J.D. Powers latest survey of customer satisfaction.
Century 21 attributes that success in large part to a variety of online marketing and communication tools including its Golden Ruler tool, launched in 2010.
Golden Ruler is an automated means for our agents to communicate with sellers on exactly what activity is occurring with their listing online — what website its on, where its getting hits, says Bev Thorne, Century 21s marketing director.
Century 21s tool addresses the age-old consumer gripe that they simply dont hear frequently enough from their agents.
More on the customer satisfaction rankings, pros and cons of using drones, and how to push back against the Zillow and Trulia merger appear in the September issue of Real Estate Broker's Insider. Subscribe today.
To Use Drones or Not?
August 27, 2014
Mark Chus clients loved the aerial videos his company used to market properties. But the Federal Aviation Administration (FAA) wasn’t so keen.
Soon after Chus local newspaper reported that he was posting drone videos of listings, Chu received a threatening letter from the FAA.
Federal officials warned Chu that he could face fines if his company, Big Realty Group, continued to post footage captured by drones.
Real estate companies have responded with varying degrees of caution. NRT, one of the nations biggest brokers, recently warned Coldwell Banker brokers and agents against using drones to market homes.
The National Association of Realtors likewise urges brokers to steer clear of drones for now.
Despite the warnings, some brokers have adopted a carefree approach. It really helps out the homeowner, says one agent. Thats my job — to get the property sold.
More on the pros and cons of using drones appears in the September issue of Real Estate Broker's Insider. Subscribe today.
Coming Soon Listings Pose Legal Concerns
August 14, 2014
Listing site Zillow recently launched coming soon inventory, a feature that lets home shoppers search for homes not on the market but expected to be listed for sale within 30 days.
The National Association of Realtors immediately jumped on the practice as problematic. If a coming-soon listing turns into something akin to a pocket listing, its possible the home might not be fully marketed to the broadest swath of buyers.
Agents who use such listing tactics would be wise to fully disclose the potential downsides, NAR says.
Agents who arent cautious about coming-soon listings can run afoul of state laws, MLS policies, or the Realtor code of ethics, says NAR. Whats more, an unsatisfied seller could allege in a lawsuit that a broker breached his duties if the broker didnt seek the highest possible price, or if the seller didnt understand that a marketing strategy might not bring the highest price.
Additional cautions and industry comments on coming soon listings appear in the August issue of Real Estate Broker's Insider. Subscribe today.
Broker Drives Hard Bargain with Realtor.com, Zillow
July 31, 2014
Brokers love to complain about Zillow, Trulia, and, to a lesser extent, Realtor.com. But Howard Hanna Real Estate Services, one of the nations largest brokers, has shown it’s possible to gain the upper hand when negotiating with listing aggregators.
Howard Hannas latest deal with Realtor.com is noteworthy for the concessions made by Realtor.com. The brokerage negotiated a Showcase Listings package that shows only the Howard Hanna agents contact information and photo.
Advertisements by other companies are not permitted on our listings, and a significant factor in our decision to work with Realtor.com is that they do not feature competing agents photos and contact information on listing detail pages, says Helen Hanna Casey, president of Howard Hanna.
As the listing sites have gained power and traffic, brokers have largely decided that they have two choices: To go along with the practices or to opt out altogether, as a handful of large brokers have done.
Howard Hanna suggests that theres a third alternative, one that involves driving a hard bargain.
Details of Howard Hannas deals with Zillow and Realtor.com appear in the August issue of Real Estate Broker's Insider. Subscribe today.
Award Winning Brokers Share Service Secrets
July 17, 2014
Telling sellers about good news is easy. Even an ineffective agent can pick up the phone immediately to inform a client of a generous offer.
But communicating bad news? Thats not as fun — yet its how ERA Levinson Realtors agents set themselves apart.
Levinson Realtors was honored by ERA Real Estate for customer satisfaction levels topping 95 percent.
The biggest complaint we get from clients is that lack of communication, says broker-owner Scott Lauri.
The solution: He advises agents to check in with clients at least once a week, even if theres no major news to convey.
Communicate anything and everything, even the little things we as agents take for granted, Lauri says.
For another ERA franchise honored for its customer service, communication is equally crucial. But saying no might be the most important communication skill employed by agents, says Jim Carr, broker at ERA Courtyard in Amarillo, TX.
We tell our agents to say no, Carr says. Desperate agents say yes to anything. We make sure our agents are trained so well that theyre never desperate.
By telling agents to say no, Carr gives them permission not to take overpriced listings. Agents who agree to list a home for more than its worth are setting themselves up to anger sellers.
More strategies to keep customers happy appear in the July issue of >Real Estate Broker's Insider. Subscribe today.
At Realtor Associations, Revenue Bounces Back, but CEO Pay Climbs More
July 2, 2014
The nations largest Realtor associations enjoyed a recovery in 2012, a year when revenue rose 8.7 percent to $392 million.
Real Estate Brokers Insider. looked at tax returns filed by 25 large Realtor associations and found that associations paid their top executives $11.1 million in 2012, up from $9.9 million in 2011. Financial statements for 2013 won’t be available until next year.
To see an interactive graphic showing revenue and compensation for 25 large Realtor associations, click the chart above.
Real Estate Industry Turns to Predictive Analytics to Refine Marketing Efforts
June 20, 2014
Since August, Steve Kunkel has been using predictive analytics to decide which homeowners to call, and as of late April, he had closed five deals as a result of his efforts.
Were very pleased, says Kunkel, part of a husband-and- wife team at Keller Williams in Atlanta.
In early examples of this new breed of consumer research, Netflix knows what movies you might like based on your past rentals, and Amazon recommends books by looking at what you and others have bought in the past. In the real estate industry, Trulia suggests homes by studying patterns of properties that buyers have clicked on in the past.
Kunkel says his rationale for trying the software was simple: As he shifted from short sales to traditional sales, he needed leads.
We have a farm of 2,500 people, and mailing to that many people is expensive, he tells Real Estate Brokers Insider.
Obviously, there are people [on the list] who may never sell, he says. Even if it only raises the odds of success, big datas brave new world promises to make agents jobs easier.
Details on Kunkel and other agents experiences with predictive analytics appear in the June issue of Real Estate Brokers Insider. Subscribe today.
Broker Focuses on Gay and Lesbian Market
May 27, 2014
As gays and lesbians gain mainstream acceptance in American society, Dream Town Realty in Chicago started an LGBT Client Services Division. The new business unit has 16 brokers led by Todd Szwajkowski.
Despite growing mainstream acceptance, lesbian and gay buyers and sellers like to work with lesbian and gay brokers, Szwajkowski says.
What we kept hearing is, Yes, Id prefer to work with somebody from the community, because I dont have to explain myself, he says.
Dream Town Realty owner Yuval Degani is not gay, but he saw an obvious opportunity in the combination of Chicagos vibrant gay community and a changing legal landscape. Illinois last year became one of more than a dozen states to officially recognize same-sex marriages.
Dream Town Realtys approach to marketing to lesbians and gays is simple:
- Put out a welcome mat in the form of a web page and seminars.
- Show expertise about changing marriage laws.
- Market your services, but dont steer certain buyers to certain listings.
Details on Dream Town Realtys LGBT marketing program appear in the May issue of Real Estate Brokers Insider. Subscribe today.
Cloud-Based Brokerage Goes Public, Sells Shares to Agents
April 24, 2014
Virtual brokers have been popping up nationwide, but broker Glenn Sanford serves up a new twist on the low-overhead model.
He calls his publicly traded brokerage a cloud-based company. eXp Realty International Corp. is based in Bellingham, WA, and over the past four years, Sanford has recruited 355 agents in 29 states and Ontario, Canada.
To earn its split, eXp offers more than a dozen training sessions a week. One recent topic: Using drones to take photos of listings.
We have classes going on throughout the week, Sanford tells industry newsletter Real Estate Brokers Insider.
In addition to its unusual tech offerings, eXp has a unique ownership structure. After merging with a shell company in 2013, eXp is publicly traded as a penny stock, with Sanford owning more than 40 percent of the shares.
Sanford is not a fan of franchising, which he believes adds unnecessary cost to a brokerage model. But he is urging agents to buy shares of his company. eXp Realty trades on the Over-the-Counter Bulletin Board, a marketplace for small, untested companies that generally get little love from Wall Street.
Shares traded in mid-February at 45 cents, but eXp offered shares to agents for 30 cents. Part of the reason for the discount is that the shares are restricted and cant be sold for eight months.
Details on eXps low-overhead model, splits, and recruiting incentives appear in the April issue of Real Estate Brokers Insider. Subscribe today.