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Three terrible shoes dropped in 24 hours, and if you are 40 or older you’ll recognize the three obituaries personally, albeit for different reasons. 

  1.  Last night, the world found out that Mark “the Bird” Fydrich had died tragically at his farm in Massachusetts. Fydrich, the 1976 AL Rookie of the Year with the Detroit Tigers, won 19 games and made the country smile with his unusual on-field habits. He’d talk to the ball, shake infielder’s hands after a good play, and get on his knees and smooth out the dirt on the mound when he wasn’t getting opposing hitters out. I remember reading his autobiography as a kid in the St. Ann School library. Injuries cut short his career, but by all accounts he remained the same happy go lucky, down to earth civilian that he was in his all too brief major league career. He was only 54. 
  2. Harry Kalas, the long-time voice of the Philadelphia Phillies, died at age 73. Kalas was known for his unique, distinctive voice that made me consider him the John Facenda of baseball (he did decades of work for NFL films too). I thought he’d make a great replacement for Bob Sheperd as the PA announcer at Yankee Stadium. If you want to hear a great Harry Kalas call, go to YouTube and search for Mike Schmidt’s 500th home run call. It is an iconic moment, visually thanks to Schmidt and audibly thanks to Mr. Kalas. His last broadcast of last season was the Phillies winning the 2008 World Series. He was far too young. 
  3. Marilyn Chambers, iconic 70’s adult film star, was found dead at her home. Her popularity crested before I ever knew who she was, but I have three older brothers. Fraternal osmosis, I guess. She was also the original baby on the Ivory Snow box, which didn’t last very long after her adult film career began. She was only 56 and had been through many highs and lows, from addiction to marriage and motherhood. The Times story tells how she thought in the 70’s that her porn notoriety would help her cross over into legitimate cinema. Again, she was too young to die. 

Not a banner day in the life of any male baseball fan, expecially if you are in Detroit or Philladelphia. My symapthies go out to all three families.

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There continues to be a series of article at Inman News about the compensation of real estate agents. The latest article, entitled “6 Percent is Dead,” the owner of a web-based company chimes in with his view. A version of my response is below:

I have not read every article in this series, but the two I have read were written by an agent whose blog paints a picture of frustration who is muses for a salary; and a web-based firm which doesn’t do traditional brokerage in a market where local listing agents have to accompany every single showing (no easy feat).

Inman may get alot of chatter and mileage from these articles, but in light of the failure of Foxtons and Iggy’s House, Real Estate never had the massive Internet-fueled sea change we saw in travel, insurance and stock brokerage, which revolutionized entire industries almost overnight.

I’m also a little tired of people poo-pooing the role agents play in the home buying process. The “I saw it first on the ‘Net so I don’t need a broker” game is tired, inaccurate and obtuse. You saw it on the net first because you were on a broker’s website and they figured out how to make it play into their model. The rest of the process is so clunky, complicated and drawn out that the best brokers who do the most business drive the traffic while working at companies where they can earn the most for their expertise.

Read the rest here on my ActiveRain Blog .

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I want repeat business from past clients and I also want their referrals. That won’t happen by accident, and I don’t see recipe cards as being useful. So I am available for other things they need after we close on the house. Here are just a few.

  1. Help them grieve their taxes. The taxes on homes I’ve sold in recent years may be reduced. I just emailed 4 recent sales to someone who bought a house with me in 2006 and it looks like his assessed value should go down by $50,000.
  2. Market updates. People are curious about how much a new listing as asking or what a nearby home sold for. Better that they ask me than another licensee.
  3. Make them hip to my blog. Past clients may wonder what my thoughts are about the stimulus bill, where the market is going, or just I am doing in this economy. I tell them right in these pages. Clients are a built in readership, and they select themselves- no emails for them to delete and they visit when convenient.  
  4. Service directory. Most of my clients use the lawyer, lender and home inspector I refer. I also have a filing cabinet filled with plumbers, carpenters, electricians, landscapers, chimney sweeps, heating & cooling firms, oil companies, and other sources that homeowners need. I may not be the good housekeeping seal of approval, but whoever I refer will make me look good for doing so.
  5. Network them! I count among my past clients physicians, restaurateurs, free lance artists, contractors, insurance brokers, roofers, teachers and dozens of other professionals. If someone needs E & O insurance, a tutor, artwork or a new driveway and they ask me if I know someone, why wouldn’t I give business to the people who gave business to me? If you need something, call or email me.

ALSO- The STAR exemption for your property taxes is key to saving money on your New York property taxes. All of my clients are encouraged to fill out an application to get it ASAP after closing. If you haven’t followed through, contact me and we’ll help you get it done.

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With the economy in decline and the housing market more so, real estate agents are leaving the industry. This is first and foremost a sad thing for anyone who loses a job or has a business fail; I never like to see anyone suffer or have financial problems. Overall, however, there is a silver lining to that cloud for the consumer and the licensees who remain active in the industry.

Not all, but a disconcertingly high percentage of the ex-agents should never have been agents in the first place. In the market run up from 2002-2005 we saw an unprecedented number of new and reactivated licensees enter the market to share the bounty. However, while the short term profit may have been favorable, we are still paying the price of the inexperience and, often, the negligence of practitioners who were able to outrun their mistakes in the irrational exuberance.

I remember well the calling cards of new agents who could hardly believe their good fortune at their involvement in a high-dollar transaction. Deals got screwed up left and right, but who cared? Another offer was a week away. And if you had a neophyte representing you in a purchase, it was never their fault your offer wasn’t accepted, you just lost a bidding war. We had people who never sold a house in their life collecting commissions on multimillion dollar sales like it was candy land. Just like the stock market spike of the late 90’s, many of people looked far smarter than they really were.

I know this because I am part of the cleanup crew. People listing their homes for sale today are horrified to discover that decks, finished basements or bathrooms they were told were legal at their purchase are, in fact not in compliance. Neither the last listing agent nor their buyer agent bothered to pull the property card, and the title company missed the detail in the rush of the time. I am in the midst of selling a property that last passed title in 2005 which has a submerged oil tank that would have failed a test in 1995, let alone now. It is costing my clients over $20,000. Twice in the past few months I have run across people who have excellent credit inexplicably stuck in high interest loans, most likely because a loan officer decided that profit superseded honesty. Where was their agent? Where was the advocacy? The list goes on, but I wish I had a dime for everyone who tells me that they regret using their newly licensed cousin or part-time aunt for their agent last time.

In each of these instances, an agent was paid handsomely. They did not earn that commission; it was monopoly money they used to buy homes and cars that they can no longer afford. In many cases they meant well, and their broker is responsible for the mistakes. We’ll never know in most cases, but our collective karma has caught up with the industry. Sadly, whatever price we bear is more than being shared by our clients who trusted us with their financial lives and were often hurt. We made our bed and now we are sleeping in it.

This brings us, of course, to today. One agent I know has his real estate website redirect to another endeavor. BMW’s have given way to Hyundai’s. An attorney told me recently that his biggest source of bankruptcy filings and short sales are real estate agents themselves. Enormous brokerage offices have rows of empty desks. And I am bombarded by solicitations for 2nd income opportunities from people who must know that agents are scrambling for income. Attorneys are actually thanking me for referrals.

But those of us who remain plying our trade have discovered a new environment: fresh air. It isn’t so noisy in here anymore. The overwhelming percentage of agents I am dealing with now are returning my phone calls and emails in a professional, timely manner. Oil tank tests, surveys and other due diligence are being handled in the beginning of transactions and not as part of a last minute scramble. Many agents are telling me how they remember the last decline in the late 80’s and how they coped. We are a profession again, not a pit stop for career nomads. We are conducting business, and even though the circumstances are worse, the process is civil and professional because the frosh and junior varsity are no longer clogging the field. And we know how to cope with the PR problems exacerbated by the “exes” because we always have.

Consumers now should have more confidence in the industry because by and large the pickers of low hanging fruit have left the market. Those who remain are survivors, fighters, and overall far more professional and experienced. They don’t pick apples with a broom and bucket; they know how to use a ladder. The drama may come from the outside, but far seldom from the agents themselves. It is for these reasons that I am glad the herd has thinned. I no longer have to sift through newbie’s to find a competent colleague. And these are people that know how to return a phone call, pull a property card, review a good faith estimate, and advocate for their clients. I’m not doing their work for them, or cleaning up their mess.

I salute the survivors, and I look forward to closing transactions with them. Together, we’ll help repair the damage done in the past decade and build the public’s confidence in the profession.

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We live less than a mile from the Hudson River, which has some spectacular fireworks this time of year. It gets very loud. There are many countries where the sound of explosions is alarming. What makes America different is that when we hear explosions nearby, we think of a family spreading out a blanket and having a picnic while they watch fireworks, absolutely free from fear.

You could name many places where people’s first thought on distant explosions is not a party somewhere.

For that I am thankful to our men and women in uniform, so many of whom gave all.

Enjoy the day.

                               

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Discounting commissions is not necessarily a gimmick. Numerous discounters, such as Help U Sell and Assist 2 Sell have been around for decades. I have no beef with them, especially since my own commission for selling their listings is no different from other firms. This blogger is also a successful discounter, and is even defending his higher priced colleagues in his post. However, I had to respond to one sentiment of his, and I have copied my comment below:

As I’ve written about before, I’ve never been able to have someone justify why it costs three times as much to sell a $300,000 home as it does a $100,000 home.  Is there 3 times as much work involved?  I don’t think so.

Compensation is not a measurement of labor. If it were, the CEO of a company who makes $250,000 would have to work 5 times as much as the employee who makes 50k. The CEO cannot work a 200 hour week. However, he or she oversees the exchange of large amounts of money; that, the commerce, is the point. A CEO oversees millions changing hands and to a degree is less replaceable than a grunt. A rank and file employee oversees their limited duties and is replaceable to the extent that their job can be performed. Anyone can make a widget. Not anyone can run the company. Anyone can sell a $1000 used car out of their driveway. Not everyone can sell a mansion. Compensation, therefore, is measured by the amount of money one can affect to change hands.

If an agent brokers a $1,000,000 transaction he or she is absolutely entitled to a proportionately larger compensation than in a $200,000 deal. More money has changed hands, more commerce has been engaged in, more title insurance has been sold, more homeowners insurance has been brokered, more taxes have been paid, more upkeep will be paid, more mortgage money has been sold, more money has been deposited and subsequently invested, more cars will be parked in the driveway, more amenities like pools, media rooms, & upscale appliances will be consumed, and, in short, everyone going forward will reap more from the million dollar deal than the 200k deal. The agent should not be exempt from this.

There is also an issue of liability and exposure to risk, errors and omissions that is magnified in a larger transaction. Again, the greater the risk, the greater the reward.

I won’t go into detail about the feeding and care for a million dollar client as opposed to a $100,000 client. There are two different universes. I have yet to have the attorney for a starter home purchaser send me on a wild goose chase to ascertain the HOA and subdivision rules on mineral rights.

Far be it from me to second-guess Mr. Mitchell’s chosen way of doing business. Anyone who has lasted in their current model for 13 years is certainly credible. That said, Mr. Mitchell is paid what he believes he is worth on a given transaction. I am paid what I am worth. If and when Mr. Mitchell decides he is worth more, there are certainly examples out there, myself included, who will give him ample justification.

 

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