Sellers Just Don’t Care

That’s what the broker told me when I asked him what his clients think about paying him $100,000 plus commissions to sell their swanky Manhattan apartments. And when I asked him why he said, “that as long as they got their money they didn’t care how much I make.”

Since these apartments are in great demand, not only do they sell for over a million dollars, but they tend to sell very quickly and without much effort from the real estate agent. On an hourly basis, I’d imagine some New York real estate agents make a couple thousand dollars an hour. That’s more than the finest surgeons in the world. And all without the need for a college degree.

It’s called the Pay Day Effect and it’s the driving force behind the $60 billion residential real estate industry in the United States. Home sellers sell their home with some equity and as long as they get to keep most of it, they don’t care how much their real estate agent makes.

For the past three years I have been trying my hardest to educate home sellers how to intelligently sell their homes and pay a fair commission, which is far less than the customary commission. In this way they get to keep more of their equity. It’s not hard to do today, you just need a little education.

Well guess what? They don’t want that education, because home sellers just don’t care. As long as they get theirs, they don’t care if they’re getting ripped off.

I learned a hard less these last three years: You can’t educate people to want something. And by and large, home sellers don’t want to keep more of their home equity. It’s just not that important to them.

So, I’m retiring from the home seller education business. Oh, my book and ecourse are still available and any home seller wanting an education can certainly find them. But I’m done trying to educate people into wanting something they clearly don’t care about. I’m done trying to fix a broken industry. I’ll leave that to the millennials and gen xers who put more faith in technology than they do in human beings.

Goodbye and good luck.

To learn how to keep more or your hard-earned equity when you sell your home, check out The Intelligent Home Seller eBook and The Intelligent Home Seller eCourse.

Use These Words to Sell Your Home Faster

CoreLogic, a real estate data gathering firm, recently published an article on their Insights Blog that actually tells you what words to use (and not use) to describe your home if you want to sell it fast. You can read the article for yourself on their website, but here is a quick summary:

Words that sell your home faster Words that sell your home slower
Fenced backyard Golf course
Open concept Gourmet kitchen
Natural light Ceramic tile
Updated kitchen Granite countertop
Single story Two story

 

To learn how to keep more or your hard-earned equity when you sell your home, check out The Intelligent Home Seller eBook and The Intelligent Home Seller eCourse.

Will Any of These New Real-Tech Companies Disrupt Real Estate?

Since it costs about four times more to sell a home in the US (and Canada) than any other country, my definition of disruption in the residential real estate industry is any technology that dramatically lowers the cost of selling a home.

So, will any of these new real estate technology platforms disrupt anything, or will they be like most of the others? Just high-tech versions of the status quo.

hausThe first entrant in this real-tech competition is Haus. If I had to boil it down to a single sentence I would describe Haus as a real-time offer notification platform. Rather than have the buyer’s agent fax or deliver an offer to purchase to the listing agent, they simply upload it to the Haus repository where everyone can see it and it can trigger notifications to interested party.

Disruption factor: Almost none. Haus is not much more than the next generation fax machine. I’m sorry to tell you, but unless you’re cutting out the middleman (i.e., the agents) or dramatically reducing their role (and associated fee), you’re aren’t disrupting anything.

iList

The next entrant is iListProperties. Their claim to fame? “Being the ONLY TRUE A La Carte real estate company with a NO RISK model.” They are currently only available in NY City, Florida and Texas. What is iListProperties really? A portal for finding fee-for-service agents (sometime referred to as real estate consultants).

Disruption factor: Some. As home sellers become more comfortable with the available technology and home selling in general, they’ll start to migrate more toward the fee-for-service model, which does reduce the role of the middleman agents. The rub of course is that fee-for-service agents have been around for two decades. Will iListProperties increase their popularity? Only time will tell.

dwellownerOur last entrant in disrupt-o-mania is DwellOwner. They claim “No Commission Full Service For Sale By Owner.”  That’s a fancy way of saying they offer bundled FSBO services, which ostensibly includes some access to a local agent as an advisor. I’m sure the other local agents will be delighted that some of their own are assisting FSBOs.

Disruption factor: Some. It would be more but there are already a dozen companies doing this. But I do think this new “assisted FSBO” idea is quietly becoming the transitional model between the status quo and eliminating listing agents altogether. So yeah, I hope they succeed.

So, which one will be a big winner, if any? Hard to say. None of them is a truly unique business model and none of them is addressing the single biggest cost to home sellers today: having to pay for an agent that helps the buyer. The company that does that will forever transform the American real estate landscape. I’m still waiting.

 

 

 

 

 

 

 

To learn how to keep more or your hard-earned equity when you sell your home, check out The Intelligent Home Seller eBook and The Intelligent Home Seller eCourse.

The Simple Secret Any Realtor Can Use to Get More Business

You want more business? Charge a fair price. You’ll have no competition. Word of mouth will spread like wildfire. All the Zillow ads and open houses in the world will not be able to touch you. Tom Ferry will not be able to coach your competition past you. You will be the rulers of your neighborhood and you will be the envy of your competitors. Of course you will have to deal with buyer steering, but hey, you chose to be in an industry that espouses ethics but may not actually have any.

You see, home sellers no longer believe the “you get what you pay for” crap when you’re charging 30 or 40 grand for 20 hours’ worth of work. And it’s only going to get worse when the millennials start selling homes.

Your problem is that you view charging anything less than 6% as a discount, like somehow discounting is a bad thing. Don’t knock it—it’s made Walmart one of the biggest companies in the world.

But what it is a discount of? A made up number from a 100 years ago that means absolutely nothing today. Twenty years ago it would have been a discount. Today’s it’s simply known as market pricing.

I don’t have to tell you the reality. There are dozens (or hundreds) or realtors in your neighborhood all trying for the same few listings AND all of you are top performers. So, how will you distinguish yourself? Become the bargain. Under price and over deliver. Or just keep slugging it out with your fellow realtors, indistinguishable from one another. The choice is yours…for now.

 

To learn how to keep more or your hard-earned equity when you sell your home, check out The Intelligent Home Seller eBook and The Intelligent Home Seller eCourse.

Can a Realtor Fix the Broken Real Estate Industry in the US?

“Real Estate, by far, is the most screwed-up industry in America.”
-Glenn Kelman, CEO of Redfin

Here’s a list of things that are broken with the real estate industry in the US:

  1. Commission is proportional to the price of the home, not the effort to sell it
  2. Realtors have to risk working for free
  3. Inexperienced agents charge the same fee as long-term super-stars
  4. Home buyers don’t pay for the person serving them
  5. Buyers get to see how long a home has been on the market
  6. Real estate agencies spend 90% of their time recruiting new agents and 10% helping their customers

The remarkable thing about this list is that it was complied by a real estate agent: Greg Hauge (the Muhammad Ali of real estate). Greg, among other things, is a realtor. And Greg gets it.

The only question I have is, if one realtor can see it, why can’t they all?

To learn how to keep more or your hard-earned equity when you sell your home, check out The Intelligent Home Seller eBook and The Intelligent Home Seller eCourse.

The Biggest Lie You’ll Hear When You Sell Your Own Home

Do you what they call a buyer who makes a lowball offer in today’s market? Renter.

FSBOI can certainly understand a home seller wanting to sell their own home. There are three compelling reasons to do so:

  1. In today’s market a properly priced home will practically sell itself
  2. Most buyers find a home online, without the help of a realtor
  3. It saves a ton of money

Of course if you do sell your own home, you will likely encounter an old wives tale that has been passed off as the truth. The story goes that when you sell your own home, savvy buyers will know that you are saving the commission and will expect you to pass that savings on to them, so they will just subtract that amount from the “fair” offer they make you.

Maybe that logic works in a buyer’s market. Then again any lowball offer may work in a buyer’s market, depending on the motivation of the seller. But in the seller’s market like we have today in most areas, following that logic will keep you on the outside looking in.

The truth is that most homes for sale today are extremely competitive, tend to sell quickly and for over the asking price—even homes being sold without a realtor.

So, go ahead all you FSBOers. Take some great photos, price your home intelligently and don’t worry about passing on commission savings. It’s just a myth perpetrated by those who don’t benefit when you sell your own home.

 

To learn how to keep more or your hard-earned equity when you sell your home, check out The Intelligent Home Seller eBook and The Intelligent Home Seller eCourse.

The One Real Estate Broker in America Who Gets It

Good news: There’s a real estate broker in America who gets it. They actually have the courage to talk about the “elephant in the room” right on their website. They have the courage to pose the most uncomfortable of questions: Why does it cost so damn much money to sell a home in 2016?

trelora

Who is this broker? Trelora. And they are the future of real estate brokerages. Here’s their crazy idea: one flat fee of $2,500 for both the listing agent AND the buyer’s agent. And while these low fees will undoubtedly incur the wrath of the real estate community and incite serious buyer steering, in hot real estate markets like we have today, it may not matter.

Bad news: Trelora is only available in Colorado right now.

Are they courageous or just plain smart?

As home sellers become comfortable with the newly-available technology and information, they will ask the same question posed above, and more and more of them will find themselves hiring the Treloras of the world.

You see Trelora isn’t so much courageous as they are smart. There is a land grab for highly intelligent and motivated home sellers who refuse to play by the old rules and Trelora intends on getting their unfair share.

Soon, there will only be two kinds of real estate brokerages in America: the Treloras and the out-of-business.

You go Trelora.

To learn how to keep more or your hard-earned equity when you sell your home, check out The Intelligent Home Seller eBook and The Intelligent Home Seller eCourse.