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Have agents made so much money in the past that they need not be concerned with details?  Most of the ancillary services offered to Realtors have a common thread.  Good enough is good enough. 

• Websites don’t need to look good, you just need to have one.  “Get a template.”
• Standardized direct mail marketing.  Hey we all say the same thing right?  “Don’t forget to put your picture on it.”
• Lead providers that still collect names in popups online then sell it to Realtors for hundreds of  dollars.  “Hey you only need one right?”
• Newspaper advertising that marks the prices up for a Realtor ad.  “You have the money.”
• The showing service that is inadvertantly rude to my clients and other agents.  “They’re really busy.”

That’s just the short and local list.  The local Realtor associations push their poor quality products down your throat with little or no choice for alternatives.  The Denver MLS that we pay for by the minute is incredibly slow.  Realtor.com,  … I think that says enough.  When will there be actual quality services for real estate professionals that just want to focus on their business?

While I think many Realtors in Denver probably already knew this, it seems buyers are coming out of the woodwork.

Denver Metrolist is reporting good news for buyers and sellers alike. While days on market have gone up significantly from last year, 14% over last year to 117 days, so did ’solds’. Sold listings for January were up almost 25% since this time last year. (statistics from Denver Metrolist for the month of January 2007) Good news for buyers? Well, prices were down a touch as well compared to last year at this time.

I like to think that activity in January is a harbinger of what the first half of the year will be like. It’s been a busy couple of weeks for me. I’d imagine that many agents around Denver are breathing a sigh of relief if the same thing is happening to them. It’s almost as if the market was artificially supressed by poor media coverage. I haven’t heard anything horribly bad in weeks.

I’m not saying that all is warm and fuzzy. January’s DSNews (Default Servicing magazine) reports that Colorado’s foreclosure rate is 2.7 times the national average. Look out Douglas and Weld, you have a new contender for top foreclosure county. Adams County now tops the list with 1 foreclosure for every 132 households. But the truth is, this is actually an improvement from where it’s been.

My Real Estate Market predictions:

It doesn’t take a rocket scientist to realize that the job market and commercial office markets are healthier than they’ve been in years. Real estate will always be based on what’s going on locally. In particular, the job market has more to do with how the real estate market will do next year than interest rates will ever have. More jobs will mean fewer defaults on loans. And higher incomes mean higher home values. If buyers can afford to buy a limited supply of quality homes in desirable areas, prices will go up, and vice versa. So if there are jobs in Denver, I’d imagine home prices will remain stable or even show modest growth. Look for areas like Sunnyside, Berkeley, Bonnie Brae, DU, Cherry Creek, Cherry Hills Village, Greenwood Village, Englewood and Washington Park to see continued growth (1-3% this year), while areas like Highlands Ranch, Green Valley Ranch (Denver), Park Hill (Denver), Northglenn, Thornton and Southwest Denver will show some declines as high inventory and foreclosures put pressure on sellers to drop prices (2-5%).

Technorati Tags: Denver, Real, Estate, Statistics, Foreclosures,

When I read this, I had to laugh. I’m always interested in how agents try to justify their commissions. This one’s pretty funny.

The settlement sheet shows that I’m going to receive ___% of the sale price of the home. But I don’t get to KEEP all of that. I take out a dollar bill and hold it up as a visual example. If another agent listed/sold the home, I have to split my money in half with them. RII-IIIIIP! (Ripping money, even just a dollar, gets people’s attention.) Then there’s my split with my broker (riiip!), my franchise fee (riiip!), my split with my partner, my E&O insurance, Uncle Sam’s portion, and all the money that I put in up front in gas, marketing and so on. Gentle reminder: my job does not have insurance or a 401K, so for those I’m on my own. We end our discussion looking at my little confetti pile and the tiny scrap of dollar that I’m still holding. It’s very small, if I’m lucky about the size of a postage stamp, but usually less than that. I do not earn what the public thinks I earn. Educating my clients keeps them from feeling rippped off at the successful end of our quest, more likely (I hope!) to use me again or refer me to friends and family. A quote from Sarah Cooper’s Blog

Here’s why I don’t think you can justify high commissions selling a home in Denver. (and probably just about anywhere with a good MLS)

1. Nobody cares. All businesses have costs and overhead. There are thousands of people out there who are self-employed in the same position as a Realtor is. You don’t see them tearing up money just to make a point. Most business owners manage business costs closely. Realtors, as a whole, do not.
2. As home values go up, so do commissions. 10 years ago in most parts of Denver, the cost of a home may have been $150,000. Your commission at 6%? $9000. Today, it still takes the same amount of work to sell the same home. Home value? $350,000. Today’s commission, $21,000. Even after splits and co-ops this is a lot for the amount of work that’s involved. Even after calculating in cost of living adjustments, you’re still in pretty good shape.

3. It’s easier than ever to sell a home. Especially for a listing agent. When you look back at the time spent it’s typically much less than that spent with buyers. Denver has a very cooperative MLS. If you offer a co-op, all those agents out there spending money to find buyers will come with their buyers to the house. In the end, 80% of homes on the MLS sell with the help a a buyer’s agent.

It’s pretty short-sighted to gouge consumers for more than you need to in order to make a good living. I’m not saying it’s not expensive to be a Realtor. There is definitely a point where you can’t go any lower without operating at a loss or cutting service. Most discounters go straight to cutting service. That’s why not all discount agents are successful. They believe that they really are worth those high commissions so they cut their services proportionate to their fees. Bad idea. Work a little harder for a change.

I like being busy. I sell homes for less because it makes me more money. That may seem funny to other Realtors but not to the rest of the world. If I offer the same service for less, who do you think they’re going to go with? It’s amazing how easy it is to get listings when you are telling people what they already believe. Just wait until they tell their friends.

Want to talk about selling a home in the Denver Area? Click Here

Technorati Tags: Denver, Real, Estate, Marketing, Commission, Realtor

How about that. I actually got quoted in Money Magazine. Albeit my statement appears a bit truncated, it is not incorrect. I’m quoted as saying “People offer higher commissions because it works”. I’ll stand by that. Offering a higher commission to a buyer’s agent does help sell your home. It doesn’t necessarily help you get a better price but it will get you slightly more traffic. I’ll explain, but first, this is what I’m talking about. The February 2007 Article entitled “Is your Realtor on your Side?” by Stephen Gandel discusses the value of having a buyer’s agent. More than that, it actually gets into the morality of the strategies some homeowners and builders are using to sell their homes. 

Steve’s seems to be trying to get his fingers on the pulse of real estate but can’t seem to get past the waiting room. I spoke with Steve on the phone after he wrote an article in the December issue of Money Magazine, “Best Ideas for 2007″. I had disagreed with him on many of the assertions he had made regarding strategies buyers could use to get a better deal. To be fair, I agreed strongly with his suggestions for sellers. In our conversation, he admitted that he ‘doesn’t have access to the same information that agents have’. Thus he has to “rely on other people” in order to write these real estate articles. He’s essentially trying to analyze data from hundreds of markets and collate that into advice that could be applicable nationwide.  He’s not an expert in the sense of personal experience but rather is forced to rely on so-called experts from across the country to give him accurate information regarding the stories he researches in order to make the valuable conclusions. I’m honored that I can fall into that category. Unfortunately, I disagree with some of the advice in the latest article. It seems the article plays more to what buyers would want to believe rather than the truth about what will help get you a better deal.  But then again,  who knows what agents across the country tell him.  This is how it works in Denver and what I disagreed with…

(If your not sure what commissions are and how they work, check the end of this post)

 Why would offering more money to a buyers agent work? Because brokers want to make a living and will be more likely to show your place in among others of the same type. This is often true in the case in newer condos or builder-owned homes where there is often a lot of competition. If you have ten other condos in your building that are essentially the same home at the same price, and then there are lots of other condos in other buildings, most agents want to narrow down what building their client wants before showing them everything that is available in one building. There are literally hundreds of condos that are similar. Do you want to go view all of them or would you like someone to help narrow it down? Most people would like some help here. Well, if I have to pick which one to show first, and they appear all the same, why wouldn’t I pick the one that pays me better, especially if they’re are all priced the same? That’s just good business. 

Unfortunately for sellers, this doesn’t seem to bring them a higher price, it just gets you more showings and helps to sell your home faster. From all the home sales I analyzed to prepare my information for Steve, I noticed that of the homes that had higher commissions sold slightly faster than homes that didn’t.  It’s not obvious when looking at homes offering co-ops slightly higher than the average because often that money is being offered to get brokers to overlook the obvious problems with the home and bring someone by.  While it might not have been as clear in the ’slightly more’ group that higher commissions bring faster sales, it definately becomes clear in the ’slightly less’ group.  When you offer less than the average commission, there is a marked difference in time on market.

I took a look at this and noticed that time on market goes up immediately when offering even slightly less than the average co-op.  Days on market increased by 12% when agents offered less than the average co-op.  This can affect the sale price since a long time on the market is viewed poorly.   Read the rest of this entry »

You can learn as much about a home’s value by looking at active listings as you can by looking at solds, if you know what to look at. Keep track of showing data to get a rough idea of how the public is perceiving your listing. It’s reasonable to expect that if you’re getting alot of showings, you’re priced appropriately. At least on paper, you look pretty good. Few showings or even no showings could be an indicator that the public and Realtors view your home as being overpriced.

Fix the problem or drop the price.

In Denver, 80% of homes listed sell because of the efforts of a cooperating buyer’s agent. With this type of exposure on the MLS, the reaction to an MLS listing can certainly be an indicator of the interest in the house and the likelihood of an eventual sale. Read the rest of this entry »