Monthly Archives: February 2014
This is a subject near and dear to my heart! I received my license in 1992 and spent the first several weeks knocking random doors, hanging door hangers, and holding open houses, to no avail, until I met a wonderful gentleman while working on the MLS computers in the office one afternoon named Ed in his late 70’s who had been a Realtor for 30+ years. I was sharing my frustrations with him when he smiled and said “you need to work expired listings and for sale by owners”. Ed and I continued to have a long and involved conversation about these opportunities. He shared everything he knew about them and inspired me to make them my new focus. The crazy part about this story was what happened minutes later as we walked back to our desks in the bull pen. Ed worked on the far side of the office opposite of where my desk was, and while he was walking through the bullpen, he fell to the floor suddenly, and right there in the office, Ed suffered an aneurysm and passed away at the hospital that day. Needless to say, at 21 years old, this was a day I’ll never forget, and I’m so fortunate to have had the opportunity to spend that time with such a great guy. Ed had a huge impact on me in that short period since back in the early 90’s, a 21 year old kid wasn’t generally received well by the other agents in a real estate office by most of the seasoned agents, and I was no exception. There was no shortage of agents willing to tell me all the reasons I wouldn’t make it in real estate. His willingness to share what he knew and impart his wisdom to me so unselfishly helped turn my failed start around almost instantly. I credit Ed for taking me from zero listings in 2 weeks to 21 listings in the next 45 days. And, yes, my pricing was all over the place, but with that listing inventory, I was able to put 6 in escrow rapidly and close over 30 transactions my first year. I don’t share this to brag, I share this because the vast majority of my business was expired listings and for sale by owners that first year and it solidified my place in the real estate business. I will share with you now why I think Ed’s advice is still relevant and will be more and more relevant as 2014 continues!
The shift from the low inventory sellers market to a more balanced market with steadily increasing inventory has created a fairly predictable 2014. While home sellers got pulled back into the market due to the increasing prices in hopes of cashing in, inventory rose enough to slow the market leaving more and more sellers pricing their homes on the high side causing them to expire from the market. These transitional conditions are creating a market that is perfect for the real estate agents who are willing to prospect two sources that have been very scarce in previous years… Expired listings and For Sale by Owners!
In every market where inventory is increasing, and time on the market is growing, expired listings are inevitable. While home sellers hold out for higher prices, buyers seek out the most motivated sellers in hopes of getting a good deal. This forces a growing percentage of homes into expiring from the market. Some of these expired sellers will relist, some will just go off of the market, and others will attempt to sell their home themselves in hopes that cutting out the commission will allow them to price the home low enough to sell and not “lose” any money.
While sellers and buyers expectations get into alignment, we will play an integral part in helping that alignment happen!
This is why so many are calling this a “real estate agents” market rather than a “sellers or buyers” market. While there will certainly be opportunities for buyers and sellers to win in this market, the real estate agent will be a critical part of creating success for those buying or selling. Great marketing, a trusted brand, a robust advertising budget, and a skilled real estate agent will matter more than they have in years! It will take more than having a license and belonging to the MLS to list and sell a home. Faxing documents to a bank on a short sale didn’t take much skill, nor did getting a short sale seller to agree to pay a commission when they weren’t paying it. The playing field was leveled and while there was definitely stronger agents than others out there, what made them strong was very different than what will make them strong now. For some of us who have been in the business for 20+ years, it is almost hard to imagine that there are agents who have never knocked on an expired or for sale by owners door. The reality is that anyone who has been in the business between 5 and even 10 years, have likely not had to work expired listings and for sale by owners because there were very few if any of them during this period.
So, here’s where the opportunity lies! While the vast majority of real estate agents will take months or even years before they begin working expireds and for sale by owners, those who start early and hone their skills by learning the scripts, dialogues, and strategies will have very little competition and a huge opportunity to list and sell a lot of homes! But be prepared, you’ll need to use your sales skills, know your presentation, know the objection handlers, know pricing scripts and strategies, be with a firm that has a legitimate value proposition to the customer, and remain consistent and focused daily!
As always, I’m happy to sit down for a private coaching session on any subject, and I just happen to have some very solid experience with expireds and fsbo’s that I’d be happy to share! I can be reached at 714-782-2723 or email at Brad.Pearson@camoves.com.
For information on joining Coldwell Banker Residential Brokerage / Previews International, don’t hesitate to give me a call!
I got my real estate license in 1992 after spending 4 years in the Air Force as an Air Traffic Controller, staring at a radar scope and making sure airplanes don’t “bump” into each other. Every single day, it was my job to provide flawless service to my pilots in the sky. The slightest deviation from my training or shift in my practices could lead to a devastating accident or mid air collision that would cost lives. Here’s the punch line… I was only 18 years old when I started and 21 when I received my honorable discharge and got into real estate. So imagine my surprise when I was told “you can come and go as you please, make a lot of money, or make no money, and here’s a set of business cards, go to work!”. Few rules, lot’s of freedom, and if I messed up, then no one died. I was fortunate though, I had tough parents who taught me a solid work ethic, and 4 years in the military to build some pretty solid discipline. Additionally, I had a great broker and some guidance from some of the greatest real estate agents that ever lived! These agents cut their teeth in real estate for years before I arrived without the benefit of fax machines, email, cell phones, text messaging, and yes…even voice mail! They told me the stories, and shared with me some of the best practices that made them successful. Even as fax machines took over, and email arrived, these agents fought to continue some practices that frankly should have never gone away! In this post, I will be sharing one of those practices that we owe it to our customers to bring back. But it won’t be easy!
Before fax machines, email, and the onslaught of home foreclosures and short sales in the early 90’s, if an agent wrote an offer for their buyer, it was expected that the agent would present their buyers offer to the seller themselves and better yet, they would actually “negotiate” on the behalf of their buyer by justifying their offer with market data/info, as well as other strategies to persuade the seller to accept their offer or counter minimally. The listing agent would actually be prepared to defend the price and value of the home and employ their own negotiating strategies to help their seller get the highest price for their home. Then two things happened… First, the fax machine with the curled up “disappearing ink” paper arrived at the offices in the 80’s and were in heavy use in the early 90’s. Remember getting a fax and running to the copier to make copies of the blurry contract? Then the bank repo’s and short sales came and offers/contracts were almost all faxed to the banks. Negotiations became all electronic. Fax and wait was the process and the agents got so used to this that they began to do the same with traditional listings. Listing agents began to insist offers were faxed, and buyers agents stopped asking to present their buyers offers themselves. And this became the norm now for the last 15+ years. To compound things, many agents left the business, and were replaced with thousands of new agents, who were never taught the practice of presenting offers in person, and just picked up where everyone left off and the line at the fax machine didn’t end until it was replaced by email. Same problem, new technology!
I’m writing this post in hopes that I can inspire listing agents at the very least to begin demanding that the buyers agents present their clients offers to their sellers. While I’d love to have buyers agents demand to present offers, without the listing agents cooperation, it will never work.
My belief is simple. Great negotiators earn their clients more money and better terms! It is impossible to utilize great negotiation skills and strategies via email or fax. Yet, we wonder why the biggest negotiations in most transactions begin with the agent negotiating with the seller for their commission %, and then the next biggest negotiation ends up happening in the middle of escrow when things go wrong because the offer was never properly negotiated from the start.
I propose that one of the biggest reasons a seller or a buyer should hire an agent is because they believe that agent will expertly negotiate on their behalf and in their best interests rather than just email or fax something so important to them over to another agent who will likely do the same in return. Obviously choosing a great company like Coldwell Banker is almost as important as well! 🙂
Let’s put down the smart phones, email, and faxes, and get face to face again!
Please share your comments below!
Don’t hesitate to contact me if you are interested in learning more about Coldwell Banker Residential Brokerage and Previews International! (714) 782-2723
To build a “team” or NOT to build a “team”? That is the question! It seems like so many agents ambitions revolve around the idea of building a “team”, verses simply being a top producing agent with a support staff. The name variations are extensive from John Doe Team, Team John Doe, Team Doe, The Doe Team, The Doe Group, John Doe and Associates,
Doe and Assoc., John and Jane Team, etc. etc. etc. In some cases, the team name has nothing to do with the team creator even, i.e. The Top Agent Team, Team Excellence, etc. etc. Most of the time, the team consists of one top agent and a staff with a buyers agent or two, sometimes even a partner, and sometimes the “team” is simply an agent who lost a listing to a “team” and decided that they should be called a “team” too and considers everyone from their title rep to their home inspector their “team”. This phenomena seemed to really grow and follow the increase in home prices from 1999 and thru 2004 and on when it was more palatable to split commissions, and there was a buying frenzy which flooded each top agent with listings with long lists of buyer leads via an 800 call capture number, online strategy, or some other form of advertising.
While many of the teams that are created were done well and accomplished the goal they set out to accomplish, many agents who followed the trend did not do so successfully and ended up splitting commissions and fracturing relationships with agents they brought to their team. As a manager, I’ve seen this and been caught in the middle enough times to have a strong desire to help agents do it right!
In the attached document, I cover “teams” in great detail. I realize there are many different opinions on this subject, so just know that this is just mine and I am open to thoughts and ideas in the comments below!