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Category Archive: ‘Realtor Training’

Sandicor Sanctions

This was included in the NSDCAR weekly update today:

MLS Rule Sanctions are on the Rise – Avoid Being Sanctioned by Sandicor
Below are just a few of the most common rules that MLS subscribers are sited with.
  • People and For Sale signs are not allowed to be shown in pictures
  • Photos should be from the subject property.
  • Cancelled or withdrawn listings must wait 30 days before entering as new.
  • Avoid disclaimers in the remarks section, such as “buyer to verify all information” or sold as is

But how many times have we heard that realtors adhere to a strict code of ethics?  Not just a code of ethics, but a STRICT code of ethics?

Why would you need to warn agents about breaking the rules?

Posted by on Aug 30, 2015 in Jim's Take on the Market, Realtor, Realtor Training | 0 comments

Realtor Population

The recent N.A.R-commissioned DangerReport surveyed thousands throughout the industry, and found that the #1 threat to agents was…….fellow agents.

In particular, the inexperienced and incompetent agents that threaten the credibility of others, and the industry as a whole.  Several other obvious threats were mentioned, but none polled higher. A recent Inman survey found the same result too.

Yet, the agent population in California has been rising.

agent growth

http://journal.firsttuesday.us/the-rises-and-declines-of-real-estate-licensees/2983/

What can be done?

The big brokerages feast off the new and inexperienced by giving them the worst commission splits.  It’s a fine line about training up the agents too, because once they get their chops up, they are prone to leave.

An answer?

Have realtor.com include the sales counts of each agent on their website.

They are the portal that has direct access to all the MLS systems, and are looking for an edge to exploit in their race with the Zillow Group.

The agent sales on Zillow are manually inputted by each agent, who also has to promise that they are truthful.  If Realtor.com culled the sales themselves, they could tout that they were untouched by agents’ hands.

There would be the same complaints as last time, but if Realtor.com held their ground knowing that the stats were accurate, the rest of the industry would have no other choice but to embrace the results.

It would help to expedite the evolution of realtors, which we can see below isn’t happening too fast on its own:

agents dropping out

Posted by on Aug 27, 2015 in Jim's Take on the Market, Listing Agent Practices, Realtor, Realtor Training, Realtors Talking Shop, The Future | 0 comments

Realtor Transparency

data

I am a fan of transparency.

The two best attempts of creating an agent-ranking website got shot down by realtors themselves.  But outside entrepreneurs keep plugging away, and one of them could find the right mix and hit the jackpot some day.

One website called homelight.com has agent data. To see what they presented, I looked up my own name.  They don’t go into details of where they found this data, or how to interpret this data.  No time periods are given either:

Jim the Realtor stats

Realtors complained about accuracy, but this is what we get instead – outsiders who are running an agent-referral business and using our names and numbers for eyeball bait.  They hope you’ll inquire about an agent, submit your contact info, and then they will send you two other agents who are paying them a referral fee of 25% to 30%.

I don’t know where this company gets their data.  I’ve sold around 32 homes within the city limits of San Diego, but did they get that straight from the MLS? A title company?

The average days-on-market should only be for listings sold – unless a longer average means the agent’s buyers are waiting out the sellers more effectively. On the MLS, my average days-on-market with sellers is 29 days, and buyer sales average 50 days so I don’t know where they got the 64.

Who knows about the 177.  I have more than that on my Zillow count but they may have taken their number from a few years ago?  BTW, Zillow finally corrected their sales counts.  Each agent has their sales tally on their Zillow page, but Zillow’s 12-month timer must have broke because recently they had displayed my count for the last 17-18 months.  I doubt any agents complained!  It is back to the 12-month count now.

Two broker-generated listing portals are being developed currently, and they should include agent statistics right off their MLS.  They will have the accurate data at their fingertips, so let’s create a depository of identical stats on each agent so the public can educate themselves.

Would it favor the old veterans who have more stats?

It might impress the analytical people who crave data, but consumers should be willing to consider the whole package. If photos and video were included in each agent page, any realtor could create a compelling case on why people should use them.

If agents don’t develop our own website, others like Zillow will keep doing it for us.  Or we’ll leave it the way it is now, with agents being able to say whatever they want about themselves because there’s no public way to verify.

Recently an agent mailed out a fancy brochure about being a rural-property specialist.  But a simple MLS search of her sales revealed that she had never sold a rural property. She said she had 15 years experience, but she got her license four years ago.  I guess she could have been an assistant, or sold in another state, but if you haven’t sold one here yourself in the last four years, then you aren’t a specialist.  Yet many agents get away with it because there’s no transparency.

Let’s provide a simple and identical set of data on every agent, and give explanations on how to interpret them.

These are my 16 listings sold over the last 12 months:

JtR stats

Possible interpretations by consumers:

1.  He only sold 16 listings in the last 12 months?

The blog drove a lot of buyers my way during the downturn, and I’ve been scrambling to generate organic listings since the REO listings dried up.

2. He sells them too fast.

Sellers who think it should take months to sell a house will think I’m giving them away.  But it is more a reflection of pricing accuracy and a hot market.

3. He doesn’t work my price range.

4. He doesn’t work my area.

5. He doesn’t sell my size of house.

6. He’s too busy. (I’ve sold twice this many)

7. He’s not busy enough.

8. He only works with sellers (I closed 17 buyer sales).

If each agent inputted their own explanations, they could add texture to their stats, and make their case why they should be hired.  Include a video presentation too (Zillow does).

Consumers would be making educated decisions, and we as agents should not only applaud that, we should insist on it.  Agents would have to get better at selling themselves, and those that do would get the business, regardless of experience or sales history.

I am uncomfortable displaying my stats – people are prone to poke holes and find faults.  It’s why realtors don’t want data released!  But we should all get used to our sales histories being public, because one way or another it is happening – with or without us. Let’s make the best of it!

Get Good Help!

Posted by on Aug 17, 2015 in Jim's Buyer Representation, Jim's Take on the Market, Listing Agent Practices, Market Buzz, Realtor, Realtor Training, Realtors Talking Shop, The Future, Why You Should List With Jim | 5 comments

1031 Exchange

Image result for 1031 exchange

I appreciate the analytical, business-like aspect of the 1031 exchange, and try to do a couple every year just to keep my chops up.  I’d love to do more exchanges because sellers of investment properties have to re-invest to avoid capital-gain taxes.  But it’s rare that you can find new properties locally that are a good enough buy to make it worth the trade.

But for those who can – here is a good article on the basics of the 1031 tax-deferred exchange, plus three extra points worth noting:

LINK to 1031 exchange article

The excerpt:

While you will always want professional guidance when doing this kind of swap, there are three things to have in mind from the start:

  • Be aware of “passive liability.” In other words, if you have a $1 million mortgage, do a swap and acquire a property with a mortgage of $900,000, you have “gained” $100,000 in the eyes of the taxman. If you are buying and selling large investment properties, these gains can add up quickly.
  • To “exchange” a vacation or second home, that home must be an investment property. If you are planning to swap a vacation home, you need to make the case that it is an active investment. Usually that means being able to show paying tenants for at least a year. To ensure that you do not swap an investment property for a primary residence, a 2008 IRS ruling created a “safe harbor” for dwellings in a 1031 exchange. To meet the safe harbor rule, in each of two years immediately following the exchange, the home must be rented to another person for 14 days or more, and you may not use the home for more than 14 days (or 10 percent of the total number of days the home is rented in a 12-month period).
  • An exchanged vacation home cannot become a primary residence for purposes of taking advantage of the principle residence exclusion. Property acquired in a 1031 exchange is subject to a five-year-period of exclusion from the principal residence capital gains tax benefit.

Link to full article

Posted by on Jul 30, 2015 in Jim's Take on the Market, Real Estate Investing, Realtor Training | 0 comments

Home Inspections 2

Some buyers get moving too fast and blow out, and others make offers willy-nilly and cancel for little or no reason.  Those happen – but the deals that cancel because of repairs can almost always be saved in the moment if the buyer’s agent says the right things, the right way, at the right time:

Besides, we live in a desert!

Posted by on Jul 6, 2015 in Bubbleinfo TV, Jim's Take on the Market, Listing Agent Practices, Realtor Training, Repairs/Improvements, Why You Should List With Jim | 0 comments

Shop Talk

I took in a good portion of the big realtor conference this morning via livestream.  They had some big hitters on stage too.

Rupert Murdoch delivered a 7-minute speech, and did some Q&A. He comes off as a proper gentleman, and he’s a good speaker for a guy who is 83 years old. But he didn’t deliver any bombshells, or make any big promises about taking on Zillow/Trulia:

Mauricio Umansky, the #1 agent in Southern California, also made an appearance. http://www.theagencyre.com/agent/mauricio-umansky/

He was asked about his experience with Zillow, and he said they did spend some advertising money, but found little benefit.

The average sales price in his Beverly Hills office is $2,800,000.  At that price point, he surmised that buyers and sellers would get referred to a top agent, rather than selecting a realtor who advertised on Zillow.

His office does all marketing in-house (he has 20 people in his marketing division), and agents in his office can pay an extra 5% from their split to have the company produce the marketing for their listings.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Tom and Mike Ferry were both there too, on stage together for the first time in eleven years.  Tom is Mike’s son, and the two of them worked together for 16 years in building Mike’s realtor training company.

Tom recalled the time he came to Mike with a multiple-choice proposal; to either a) sell the company to Tom (for a good price), b) create a partnership together, or c) Tom to leave the company to go start his own.  Mike chose c), and they have been competitors ever since – and you can sense that it’s still a little chippy between them.

If you are new in the business, check out both trainings – they’re good.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Zillow and Trulia were brought into many of the discussions, but no new insights really.  Realtor.com will be working hard to put out a better product, and a group of major brokers back east are secretly creating their own portal.

I think the consumers use the portals to get free information about homes, not to hire a realtor.

It’s why Zillow will likely create their own set of ‘preferred agents’ and heavily advertise the benefits of hiring them.  The realtors will gladly pay to receive those warmer leads – throw in some special ‘listing enhancement’ kits and Zillow will have the complete package to sell to agents.

Posted by on Jan 29, 2015 in Jim's Take on the Market, Realtor, Realtor Training, Realtors Talking Shop, Revolution, Speaker Panel, The Future | 0 comments

New Purchase Contract

gov

The C.A.R does make some minor changes every year to our purchase contract, but according to Gov Hutchinson, the lead attorney for C.A.R., they haven’t made any wholesale changes in 12 years.  Gov was in town yesterday to review the latest version.

Here are my notes:

1.  The form is written by C.A.R. attorneys and is meant to protect realtors.  There are 10x as many lawsuits filed today as there were thirty years ago, yet the State of California’s population hasn’t even doubled in the same time.  Home buyers file more than 90% of the lawsuits against realtors.

2.  Buyers used to have 17 days to release all contingencies, but now the new boilerplate gives 21 days to release the loan contingency.  Most lenders can hit the 17-day mark, but it’s usually tight; so the 21 days is probably more realistic. But it does add a second contingency-release date, and more paperwork.  We surmised that in the real world, all contingencies might drag to the 21st day.

3.  The separate termite form was deleted, and its contents added to the ‘Request for Repair’ form.  Previously it was customary to include the termite costs in the original offer (and assigned to the seller), but now they will be a negotiable item after the inspection, as is the custom in Northern California.

4.  You regularly see these remarks, “Seller is exempt from TDS”, which applies if the actual seller is a bank, or a successor trustee who has in effect inherited the house.  But they are only exempt from having to use our specific TDS form, they aren’t exempt from disclosing everything they know about the property.

5.  There are times when the sellers will occupy the home for days or weeks after closing (a subject to which I will devote a whole post), but it is now stated in paragraph 9F that keys and passwords be delivered to buyer on the day escrow closes, regardless of possession.

6.  The big-screen TVs have been excluded for a while, yet their brackets remain with the property.  But this version added a second choice, if the box is checked – “[bracket] will be removed and holes or other damage shall be repaired, but not painted.”  This is on the purchase offer that the buyer is submitting, so they will be guessing on whether the sellers intend to leave the bracket, or remove it and repair the holes or other damage.

7.  If the buyer adds a phrase about intending to occupy the property for 12 months, it will negate the 60-day notice required to give a month-to-month tenant who has been living there more than a year. Instead, only a 30-day notice is required.

8.  There are two stigmas that are required to be disclosed – death and meth.

9.  Sellers have to disclose any insurance claims over the last five years – whether they owned it or not.

10.  This is a first – they added verbiage about what happens when a party won’t sign off to cancel a sale.  If either party fails to execute mutual instructions to cancel, the other party can demand that escrow release the deposit.  Escrow shall promptly deliver notice of the demand to the other party, and give them 10 days to object.  If they don’t object, escrow can unilaterally release the deposit to the other party.  The form authors couldn’t resist adding a final paragraph that escrow companies can still require mutual cancellation instructions at their discretion, which we’re guessing that most will do.

11.  This rarely comes up, but if a buyer cancels after releasing all contingencies, and the seller gets their deposit – he has to split the deposit with the listing agent.

12.  It is in the boilerplate that every dispute goes to mediation.  If both parties initial the arbitration agreement, then the dispute goes there instead of going to court.  Arbitration is cheaper, quicker, and private, but it is binding – there is no appeals of an arbitration decision.  If you don’t like that, then don’t agree to arbitrate.  Small-claims court is excluded, so disputes under $10,000 can go there for resolution.

Once a seller has a signed agreement, there are no back doors – if the buyers can perform, then they are buying the house.  Once the buyers release all contingencies, they are committed too – and will lose their deposit if they cancel later.  There is always joking at these seminars that nobody reads the contract – including the agents.  Get Good Help!

Posted by on Dec 5, 2014 in Realtor Training, Realtors Talking Shop, Thinking of Buying?, Thinking of Selling?, Why You Should Hire Jim as your Buyer's Agent, Why You Should List With Jim | 5 comments

Handling An Off-Market Sale

off-market saleOff-market sales have a nasty reputation, and deservedly so because the sellers usually get screwed by their listing agent who spoons the sale to their own buyer.

A buyer for an off-market sale is typically found from pre-marketing done by the listing agent prior to inputting the property onto our MLS.  The trouble starts when the sellers, in their excitement about having an offer, don’t verify that the listing has been exposed to the open market.  If the listing agent doesn’t present that as an option, and instead enriches him/herself unjustly, then they should be held liable for the resulting damages.

Here’s how I inadvertenly found myself in this situation, and how I handled it:

Posted by on Jan 27, 2014 in About the author, Bubbleinfo TV, Listing Agent Practices, Realtor, Realtor Training, Why You Should List With Jim | 7 comments

Pocket Listings & Open Sales Data

pocket listingOnce lawsuits start flying over pocket listings (which limit exposure, and thus selling price), the practice should end quickly.  Agents don’t think there is anything wrong with them because they see so many other realtors doing it – heck, there are websites devoted to pocket listings! 

An excerpt from INews:

Their views on pocket listings were refreshing and unequivocal. Osher was particularly frank. The main takeaway: There is no place for “premarketing” or “coming soon” in an MLS-accessible market. If a home is being marketed in any way, it’s for sale. Limiting its exposure puts an agent’s personal financial gain at odds with a client’s financial return.

Possibly more striking was the conversation with Neil Garfinkel, a partner with the law firm AGMB in New York. In his personal opinion, those who engage in pocket listings are opening themselves up to potential litigation. A former client who felt they were led into a practice that didn’t maximize their financial return, and didn’t fulfill the agent’s standards of duty, will at some point be the bellwether for pocket listing litigation in the industry. Real estate licensee duties can be fiduciary or statutory depending on the state, but almost always call for a high standard of care for a client’s well-being.

While the liability discussion on that day centered on a single former client suing their personal agent, there are a number of much larger issues that seem to collide at this one point.

As real estate brokers and agents battle over opening large sets of agent production data to the public, the executives of most of the largest real estate companies seem to be signing on to the idea (Realogy’s and Re/Max’s CEOs concurred at Connect).

It’s becoming clear that the dissemination of agent sales data is becoming a question of “how” as opposed to “whether.”This new look into the practices of real estate agents and their brokerages will allow consumers to see everything their professional service providers do in a new light. Individual sales and practices will be boiled down into averages, probability and patterns.

Read full story here: http://www.inman.com/next/open-real-estate-agent-data-generates-vast-new-liability-for-pocket-listing-brokers-and-agents/2/

Posted by on Jan 25, 2014 in Listing Agent Practices, Realtor, Realtor Training, Realtors Talking Shop | 3 comments