SpencerBarron.com

Being a real estate broker is not an easy job.  Real estate has the potential to make you a lot of money but the truth is it’s not easy money.
I would like to share a couple of things that I feel everyone, especially people thinking they should get into the business, should know. 
The National Association of Realtors (NAR) is your strongest ally and strongest opponent.
     The NAR has vast resources available for you to be successful.  In fact, I dare say it’s impossible to succeed in real estate without being a member or at least dealing with them.  They have gone to bat for you on every level of government to make sure its members can make a living for themselves.  They provide education and training to their members to better equip them for success. Their code of ethics have provided a guide for conduct that usually exceed what your state requires of a real estate agent.  The code also provides a way that the public can seek some retribution when the rules are broken.
    A drawback is that while you have the support of a large group of individuals, you also have the pressure to fit in.  Agents are encouraged to ‘protect their’ commissions. Agents at larger companies are told to sell people on their personality, their work ethic, and their brand.  “Put your picture on your cards and wear your Realtor pin”, is that really going to help you?…maybe but don’t believe all the hype.  Test the ideas to find out what works and what doesn’t.  There will be a lot of propaganda you will be confronted with.  Sift through it and figure out what works for you.
   I see competition on pricing as the most important issue facing the industry.  The job is easier than it was 10 years ago.  Home prices have grown faster than the cost of living.  The same percentage commission would go a lot farther today than it did in the past.  The public knows this so don’t feed them a load of crap if you expect them to respect you.  Find a business plan that works for you.  Check with your employing broker what flexibility you will have in negotiating your commission.  Compete on price to build your business.  Why else would someone hire an entry level Realtor?  Your skills?…  please.  And nobody wants to give thousands of dollars to you just because you have a pretty face either. (Well, I can’t speak for everyone.)  You price your services based off what you bring to the table.  There will be times when you’re going to be up against a monster agent, how will you compete? 
The competition will be fierce so prepare yourself now.
If you’re just getting started, remember these things.
TOP TEN things I wish I knew when I started. Read the rest of this entry »

Existing home sales rise, prices fall. - Yahoo!

With home prices expected to fall in most major cities, many buyers continue to wait on the sidelines.  Many sellers are waiting to sell their homes to make sure they can hit the home price peak while buyers wait for better interest rates and home prices to fall.  Reluctantly, prices are edging down as buyers are waiting out the sellers.   What motivates this mentality and is it well founded? 

 What is a little confusing is that homeowners are also holding back selling their homes even when they’re planning to just upsize in the same neighborhoods.  When a seller will become a buyer in the same market, it doesn’t matter if a neighborhood has appreciated or depreciated.  The home they are buying will be experiencing the same issues.  Timing the real estate market in this manner is not as effective as selling in Spring and buying in Fall or Winter. 

    It’s understandable that first time home buyers would approach any purchase with caution.  Since they must compare their current cost of living to the increased cost of home ownership.  The X Factor in that equation is the increased value of home ownership which varies greatly for every nook and cranny of a city.  The real motivating factors behind all home appreciation is the quality of the housing stock combined with the growth of the local economy.  For example, it’s easy to understand why home prices hit a slump when rental prices don’t keep pace with the monthly cost of a home purchase.  The cost to purchase will always be higher than renting.  The value of homes is more closely related to local market conditions and what’s going on with employment in the city where you live than anything else.  Buyers and Realtors do well to consider an areas median income when determining if a market is becoming overextended as historical averages suggest a relationship between the two.  This makes sense since if the local population can’t support the home price to purchase or rent, where is the money coming from?

Many of the areas that had experienced extensive growth in home values had been historically depressed.  This being said, the question should be asked how much of the growth was normalization to reflect the local economy.  Studying the relationships here will give a clue to how long a slow down should last.