A "Team" of One

"What You See is What You Get"

I've written previously about real estate teams ("Teaming Up"), and the pro's and con's.

So it was interesting to me, during my most recent listing presentation (they hired me), to hear my now-client express a strong preference not to work with a(nother) real estate team.

Their reason(s)?

On their previous deal, they never seemed to talk to the same person twice, and nobody seemed to know what was going on with their transaction.

One vs. Many

Of course, not all real estate teams are chaotic or unwieldy.

But as someone who operates "solo" (kind of -- see next), I can assure my clients, honestly, that if they hire me . . . they get me.

That means I'm the one who walks them through the Seller disclosures; analyzes the Comp's and helps fine-tune the list price; prepares the marketing materials; instructs the photographer; debriefs other Realtors after showings; hosts the Broker Open and most (if not all) of the Sunday open houses, etc., etc.

In brief, I always know what's going on, and my client(s) will have exactly one point of contact.

Not Really Solo

Of course, it's also the case that, through my association with Edina Realty, I actually have a huge organization of professionals supporting me (sort of like the Sprint network, pictured above).

That includes a superb office manager, Josh Kaplan; an outstanding front desk and OA (Office Administrator); Edina's knowledgeable legal department; great tech support, etc.

And although I don't refer to them as "team members," I have also developed a circle of expert stagers, photographers, and desktop publishers that I regularly work with.

Down Time

So don't I ever take a vacation?

Not often enough, but yes, I do take off an average of 2-3 weeks a year, usually a long weekend at a time.

Who covers for me then?

Like other veteran Realtors, I'll typically "trade" coverage with another colleague for those things -- like doing a showing -- that can't be done remotely.

In return for their backstopping me when I'm out of town, I'll do the same for them.

Virtual Real Estate

But the surprise the last several years is, thanks to technology ("Look Ma! No Hands!"), how many modern real estate tasks can be done remotely ("virtually").

Even when I'm out of town, I'll regularly scan MLS for new listings that meet my (Buyer) clients' criteria, and won't hesitate to email them if something promising pops up (I'm actually not such a fan of searches that automatically email clients directly -- I like to weed out the "chaff" first).

It's also the case that, for something critical like fielding or negotiating an offer, my clients know that I'm never more than a phone call away.

P.S.: it's accepted real estate wisdom that the best way to sell a property is to head for the airport on vacation.

Why I Don't Price Other Realtors' Listings

Real Estate's "Heisenberg Uncertainty Principle"

The observer influences the thing observed.

--Heisenberg uncertainty principle

It seems self-explanatory, but as a principle, I don't price other Realtors' listings.

The issue usually comes up when I do a listing presentation -- essentially, a job interview for Realtors.

In the course of interviewing Realtors, homeowners (and prospective Sellers) naturally want to know how you'll market their home; your qualifications; and what their home is worth.

While I always come to listing presentations armed with the latest, nearby market activity (and am happy to offer a ballpark range), I decline to name a specific price until the homeowner commits to using me as their Realtor.

Rationale

There are four reasons why I take that stance.

One. Time.

Carefully pricing a home (vs. haphazardly) takes a great deal of due diligence.

At least for me, the steps include: identifying and analyzing the Comp's (Comparable Sold Properties); learning the history and condition of the client's home (vs. taking the 10 minute tour after first arriving); previewing the Active listings that the client's home will be competing against; identifying any Pending homes similar to the client's home and estimating what their likely Sold price is; and pouring all the foregoing into a CMA, or Comparative Market Analysis, then crunching the related numbers.

All of the foregoing takes . . . time. Done properly and well, lots of time.

As a Realtor, the two things I ultimately have to sell are my time and expertise.

If I spent undue amounts of time working for non-clients, my actual clients will suffer.

That hardly seems fair to them.

And spending the requisite 6-8 hours carefully pricing a home that another Realtor is ultimately going to list isn't fair . . . to me!

So, I don't invest that time . . until I'm hired.

Two. My price for any given home isn't a fixed number.

Rather, it depends not a little bit on the homeowner themselves.

So, do they need/want to sell quickly, or can they be patient waiting for an offer?

Can the home benefit from staging, strategic updating, etc. , and if so, is the client willing and able to do it?

Does the client want to price aggressively -- and take the risk that goes along with that -- or do they want to price more conservatively?

And so on, and so on.

Three. My price may not be the same as another Realtor's (call this phenomenon "Real Estate's Heisenberg Uncertainly Principle").

Whereas homeowners tend to think of their home as having a fixed, objective value, Realtors (and anyone who knows marketing) understand that the actual price is a range -- a fluid range that is influenced by the skill of the professional(s) involved in the sale.

A home that is optimally staged and photographed, then aggressively and expertly marketed by an excellent Realtor at a top-flight Broker is likely to sell for one price; a home where a less-talented and motivated Realtor simply shows up, gets the requisite signatures, then puts a "For Sale" sign in the front lawn, is likely to fetch . . . another price altogether.

Four. "Buying the Listing."

The last reason I won't casually price a home is because I don't want to get caught up in what Realtors call "buying a listing."

Pretty much what it sounds like, the practice consists of appealing to a homeowner's vanity (or ignorance) by throwing out an unrealistically high price for their home, and thereby beating other Realtors' "bids."

With the listing secured, the Realtor then focuses on getting a price reduction -- or several of them -- when the home proves unsaleable at the quoted price.

Bidding wars are great for Sellers, but not so great for Buyers.

That's true for Realtors, too.

As a prospective listing agent in an already tough market, the last thing I want to do is get into a Realtor bidding war to list what is certain to be an overpriced home.

P.S.: For the record, when prospective home Sellers interview both me and another Realtor . . . they hire me the vast majority of the time.

Listing Presentation Manuevering

Playing the Card(s) You're Dealt

When you have the facts on your side, argue the facts. When you have the law on your side, argue the law. When you have neither, holler.

--Al Gore

Whenever I compete against another Realtor for a listing (as I did earlier this week), I always like to find out as much as I can about my competition.

Not only does that let me tailor my own presentation, but it gives me a chance to rebut any arguments the other Realtor is making.

So what was my competitor touting in their sales pitch?

The value of a broker with national reach, to attract relocation Buyers.

Great Opening

Why emphasize that?

Because that's what their Broker had to offer.

What they omitted -- and I happily filled in -- was the following:

--Relocation sales, perhaps only 3%-4% of all deals normally, are even less in a soft economy because fewer big companies want to spend the money.

--Of that already small slice, the typical relocation sale is usually a more expensive home (think, big companies and senior executives).

--No one relies on brokers -- relo specialists or not -- to check out housing inventory anymore; they go to Google, Edina Realty, Trulia, Zillow and a hundred other Web sites.

Which was a nice segue into Edina Realty vs. the "national broker": if you want to sell your home quickly, for top dollar, you're much better off going with the company with the highest Twin Cities market share (about 20%) and most local Realtors (about 1,700).

And that would be . . . Edina Realty.

Does Networking Really Work?

Instant Access to 1,600 Realtors

Does Realtor-to-Realtor networking really work?

Well, consider this:

With about 20% of the total listings in the Twin Cities housing market, the percentage of Edina Realty listings sold by other Edina Realty agents is 40%.

That could just be because "we" -- all 1,600-plus local Edina Realty agents -- really like one another.

But the truth is, most of us don't even know each other.

What really explains that 40% statistic is the amount of intra-company networking that constantly takes place -- at weekly office meetings, online, via email, etc.

It's always nice to be able to tell a prospective client during a listing presentation (basically, a job interview for Realtors) that, just by pressing "send" on my PC, I can instantly tell 1,600 other Realtors about my hot new listing.

Dual Agency - Two Kinds

When a Buyer represented by an Edina agent sells a home listed by another Edina agent, the resulting relationship is called "dual agency."

That's because both the Buyer and Seller are represented by the same broker, Edina.

While that creates some legal awkwardness, the benefit to clients -- in my opinion -- more than offsets the drawbacks

By contrast, when the same agent represents both the Buyer and Seller, that's called "single agent dual agency."

As they say, "that's a horse of a different color."

While single agent dual agency is permissible with sufficient disclosure and both parties' assent, I personally think it's not worth the risk.

In my opinion, the only way to be on both sides of a deal is ultimately . . . to be on neither.

Doomed Deals & Silver Linings

"Recycling" Market Knowledge

It doesn't happen to me that often (fortunately), but it's always a bummer when a deal I'm involved with falls apart -- as happened the other week.

But there's often a silver lining.

In the course of handling what turned out to be a doomed condo purchase in Minnetonka a few weeks ago, I became an expert on virtually every nearby Minnetonka condo and townhouse that had changed hands in the last six months.

I also spent time driving up and down the now-complete Shady Oak Road (much wider and nicer!); pulled up plans for upcoming, nearby light rail routes and stations; and became familiar with all the nearby parks and shopping amenities.

All that fresh market knowledge came in handy barely a week later, when I interviewed to list a condo in the same area.

Impressed (in part) by my state-of-the art command of the market -- the clients hired me over two other Realtors!

"Bob & Sue Seller??" Better Make That, "Tom & Barb"

Realtor Freudian Slip?

One of the things I do in a Listing Presentation -- basically, a job interview for Realtors -- is give prospective clients a quick overview of the contracts that go into a deal (as a former corporate lawyer, I actually truly enjoy this part!).

Typically, I'll drop in "dummy" names for illustrative purposes, just to flesh out the forms a little bit.

Tired of "John and Jane Doe," without thinking I picked "Bob and Sue Seller."

Oops!

The listing presentation isn't till Monday night, so fortunately I had plenty of time to pick two other names.

P.S. For the record, after almost nine years doing this, I can tell prospective Sellers that my track record avoiding litigation (and arbitration, for that matter) is a perfect 100%!

Listing Presentation "Tiebreakers"

Throwing the Runner-Up a (Very Hollow) Bone

It's not uncommon for homeowners, in the course of interviewing agents to list their home, to be deadlocked between two (or more) agents.

What then?

To sew up the listing, I guarantee that at least one of the agents will promise that, if the homeowner hires them, they'll give the other agent's clients "first crack"at the home once it's on the market.

That way, if Agent #2 "brings the buyer," they can still split the commission with Agent #1, giving the former a substantial consolation prize.

Solomonic, right?

Not exactly.

Hollow Bone

There's no mistaking the two-fold appeal of this "gesture": 1) it makes the first agent look especially fair, even magnanimous, towards their rival; and 2) it lets the conflicted homeowner "off the hook" for passing up another agent they may have sincerely liked -- without feeling guilty about it!

In fact, however, such a pitch is invariably an empty gesture -- and the Agent making it knows it!

Here's why:

The best way to attract a Buyer for any given home is -- big surprise! -- to list it.

After all, the listing agent's name is on the sign in front of the home, on MLS, on the postcards marketing the home, etc. Plus, they're the ones hosting the Sunday open houses.

Of course, the listing agent is also the one hosting the Broker Open, when all the other local agents tour the new listings.

Statistically, the odds are vastly greater that another agent will be representing the home's ultimate Buyer.

Infinitesimal Odds

That's because even a very busy, very established agent is likely working with at most 8-10 Buyers at a time.

In turn, each of those Buyers is likely to screen an average of 60-80 homes online, and ultimately tour 12-15 of those before deciding which home to buy.

So, out of approximately 26,000 homes for sale metro-wide, the universe of homes any agent's clients are likely to be interested in seeing at any given moment is . . . perhaps 120 (8 x 15). And that assumes there's no overlap between any of the clients.

If you like statistics, that's less than .5%.

For those reasons, I focus my listing presentation on what I'm going to do for the client -- not my competitors if I'm hired.

It's also the case that a Realtor promising to let the runner-up have "first crack" can just as easily have that argument used against them: after hiring me recently, the first thing the client did was request that I call the other Realtor to make sure any of their Buyers were first in line.

P.S.: Alternative Math. If the foregoing statistics are too complicated, consider this: in my experience, the odds of any given showing leading to a purchase are about 1 in 10 (10%). Now assume (optimistically) that the odds of any given house being suitable for a Buyer I'm currently working with might also be 1 in 10.

Combine the two, and the odds of my having a Buyer for any given home are less than 1-in-100 (1%).

"Full Service," Defined

Attention to Detail + Hands On Role

What exactly do Realtors mean when they say they're "full service?"

It's certainly a fair question, because a full service commission in the Twin Cities these days typically ranges from 6% - 7%. By contrast, "discount" Realtors charge 5% or even less ("limited service" is actually a better label).

My full explanation takes about 90 minutes, which I cover as part of a formal listing presentation that I make to prospective clients.

Suffice to say, I play a "hands on" role -- starting weeks (and even months) before my listings ever hit the market, to well beyond closing.

That includes knowing all there is to know about both recently sold properties (the "comp's") and competing "Active" listings, so I can give expert guidance on pricing; suggesting cost-effective improvements to maximize the home's value; and building market awareness -- well before the home formally debuts on MLS -- both with other agents and the general public.

"Full Service" . . . in Practice

In fact, my input goes well beyond simply recommending value-adding improvements.

As an example from just this week, my client was in the process of painting their home -- at my recommendation -- to get it ready for sale. However, the paint colors they selected just didn't seem right.

I knew, because I was in daily contact with both the client and the painters.

As part of "full service," I asked two stagers I regularly work with to interrupt their schedules and come to the house, ASAP, to make suggestions from their color palettes.

Which they did. They both recommended near-identical colors, which my client OK'd, and the (waiting) painters immediately substituted.

Example #2

The second illustration of what "full service" involves was . . . today.

The key to my client's just-listed home is the Kitchen, and the Kitchen has a prominent light fixture with 3 halogen bulbs. Unfortunately, 2 of them didn't work.

Normally, my client would attend to that, but they timed their vacation to be out of the way the first week their home is on the market.

So, I went to the hardware store to find replacements. "Not so fast," the salesperson I talked to said. The bulbs were specialty bulbs, and I needed to go to a specialty store for replacements.

Which I did.

After I finished, I had just enough time to join my family on an apple-picking outing.

P.S.: And no, "full service" does not include getting my clients' dry cleaning, babysitting their kids, etc.