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Listers Last

For some reason I can not leave a comment in the comments section of this post.  So … I am making my response a new post.  Hey, that is what being one of the Geniuses is all about!

Russell, in a matter of a few minutes, can give you the names of dozens of listing teams across the nation doing equal or far more business than he does. He can’t, however, do the same for buyer agent teams.

Correct.  I am in the top 200 agents in the U.S. again this year.  But I am not “the” top.  Last year (2006 stats) I was number 25 in the team “sides” category.  There were a number of people who beat me (in both volume and units) who only had one assistant and were not even competing in the team category.  https://www.realestatejournal.com/adinfo/res/20071113-intro.asp   I don’t know of any high volume agent or team who has lasted, long term, that mainly works buyers.  This isn’t to say that some mega teams that mainly work buyers don’t do very very well. 

Am I all wet, Russell?

No, BawldGuy, completely dry.  As usual, I pretty much agree with everything that you and Bill Lublin have to say.

Listing agents don’t need buyer’s agents whatsoever? That’s the biggest load of crap I have heard for quite awhile. I am willing to bet that there aren’t any listing agents (with the possible exception of bawld guy’s dad) doing hundreds of transactions who wouldn’t crash and burn if buyer’s agents didn’t sell most of their listings.

Allan Domb from Philadelphia: www.allandomb.com for years did not bother to even put his listings in the MLS.  He sold them without the MLS.  Long term, he is still one of the most successful Realtors to have ever lived – he was doing over 1,000 deals a year 20 years ago.  He does more than that today but doesn’t still enter “contests” (like me:-)

How many of your listings do you sell yourself Russell? I am sure you can give us an exact number.

Less than 15%  To me, using MLS is much easier.  That isn’t to say if the DOJ/FTC had managed to “change everything” I wasn’t fully prepared to withdraw from the MLS.  But thanks for asking so nicely.

The thing that is tiresome is that a lot of the people doing mega listing business have this arrogant superiority complex that their way is the only way.

I am not one of those people.  I have never claimed my way was the “only way”.  It isn’t.  There are lots of ways.  None of them require my blessing.   However, I am flatly stating that if an agent’s primary emphasis is on correctly working listings vs. working buyers, it is better, easier, more profitable, more conducive to being run like any other successful business (owner can be gone and still make just as much money), and there might actually be something to sell to someone else when retirement time comes around.

There are plenty of people who make a great living working with buyers without investing 60 hours a week in the process. The trick is very similar to what it takes to be a good listing agent. Not working with just anyone, but learning how to generate enough buyer leads that you can afford pick and choose and only work with motivated buyers who are ready willing and able to make a decision.

No disagreement whatsoever with the above statement.  But if you need to be gone for 6 – 9 months (like I did in 2001 when I had cancer) it is much much easier if the business is listings based to continue making money while not there.

A lot of people think the only way you can find buyers is by having listings. That is just simply not true.

Correct.  Pay Per Click, SEO optimization, blogging – just to name a few.  But the “thing” being offered as bait to the buyer is still a house.  It makes no difference if that house is listed by you, your company or some other company.  Buyers respond best to houses.  Therefore – for optimum profit – it makes sense to have houses for them.

I don’t want to spell out exactly how it can be done, but trust me there are ways to advertise that will have your phone or email ringing off the hook. Then you can sift through the leads and find folks who have to move by a certain date, and have the money in hand.

I always do both. I generally have had between 10 and 20 good listings at all times for the last twenty years, and I am always working with at least 5 buyers.

I really don’t believe you and I have any real disagreement.  You take and market listings and have lots of buyers that you sell homes to.  Your business is listings based.  Even if you are currently selling more houses to buyers than you are listing.  My point wasn’t “don’t sell houses to buyers” but take salable listings.  Anyone who believes there is some downside to taking salable listings has a false idea.  That was – and still is – the main point of my original post.

Russell has been an Associate Broker with John Hall & Associates since 1978 and ranks in the top 1% of all agents in the U.S. Most recently The Wall Street Journal recognized the Top 200 Agents in America, awarding Russell # 25 for number of units sold. Russell has been featured in many books such as, "The Billion Dollar Agent" by Steve Kantor and "The Millionaire Real Estate Agent" by Gary Keller and has often been a featured speaker for national conventions and routinely speaks at various state and local association conventions. Visit him also at nohasslelisting.com and number1homeagent.com.

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13 Comments

13 Comments

  1. Bill Lublin

    July 15, 2008 at 3:37 am

    Big shout out to my man Mr. Domb – he was the perons I referred to in my comment on your last post. He is one focused guy- and as you point out has never been a member of the MLS, even when he was GPAR President – and yet he still manages to be very very succesful Yo Philly!

    I would also point out my Associate Ron Rudolph, who was the Top Agent in the Century 21 system three years running, selling more individual units then any other agent in the system – all a result of his listing activity.

  2. Landflip

    July 15, 2008 at 5:27 am

    I think that it is important to try to work out a deal that is a win-win for both sides. If you know the market and have some morals, one can look out for both parties and create a deal that works for both.

  3. Jim Gatos

    July 15, 2008 at 5:44 am

    Is Mr. Domb a blogger?

    I tell you, he has the most “irritating” website out there. I mean, that music… LOL…

  4. Jennifer in Louisville

    July 15, 2008 at 7:58 am

    When you represent a buyer, not very many people are likely to find out about it (loan officer, selling agent, seller, home inspector, etc). Listings however can help grow your business by establishing a market presence (particularly if you make a point to take salable ones instead of anything @ any price). People see the signs – and if they see a “sale pending” sign go up regularly on your signs, they will notice it.

  5. Dan Connolly

    July 15, 2008 at 10:30 am

    Hi Russell, Well I posted an answer over hereto your post which eventually did show up in that thread.

  6. ines

    July 15, 2008 at 11:58 am

    There’s also a psychological side to having a “listing” real estate model – If you have listings, you have business, and those listings generate even more business. We’ve seen buyer’s agents fall into a slum (or is it slump?…I woke up thinking in Spanish) that they can’t get out and end up teaming up with “listing teams” knowing open houses, street signs and property ads get actual business.

  7. teresa boardman

    July 15, 2008 at 7:23 pm

    Russell – I have been agonizing over this. I know we need to “list to live” but I have learned to be more strategic about which listings I take, which means I am not taking all that I can. One of the things I have been doing is looking at risk. I am spreading the risk. right now I have too many downtown lofts. That is the slowest part of the market and they are the hardest to sell. I just passed up on a fourth listing in one condo building, and a second listing in another. I will take listing of homes outside of downtown. I hate the idea of saying no to listings but feel I need to sometimes.

    Yet I don’t emphasize working with buyers either. I like to do both and I continue to market my services as a listing agent and as a buyers agent the same way I always have.

    Thanks for the post. Some of my peers have given up on listings, that is wrong. We need to be reminded that this business is about listings.

  8. Atlanta Condos Advisor

    July 16, 2008 at 12:31 am

    Listing to last has always been the golden rule in the real estate business. However, with most all buyers starting their search online today, agents can now have successful business with no listings at all.

  9. Frank Jewett

    July 16, 2008 at 1:02 am

    Teresa, good point on watching your product mix, since listings represent expenses and lost capacity until they sell, though I suspect many agents will envy you having the luxury of being able to pick and choose simply because they don’t generate your volume of leads. For selling, price is problem that cures most other problems. For agents, whether focusing on sellers or buyers, lead generation is the problem that cures most other problems.

  10. Frank Jewett

    July 16, 2008 at 1:11 am

    Ines, I would think any successful agent who didn’t have a listing would pick up an open house to look for buyers. Working “listings by referral only” is often an excuse to stay home and cash fewer checks. I understand the concept of pacing yourself by working 40 hour weeks, but most listers I’ve seen didn’t put in those 40 hours unless they had several listings. I’m not sure the “slump” analogy is fair. I see picking up an open house as sign of dedication to growing your business at the expense of someone who either has plenty of business or is more likely using “listings only” as an excuse for complacency. I’ve seen more than a few listers who basically phone it in once they get the signed listing agreement.

  11. ines

    July 16, 2008 at 8:07 am

    Frank, we are not questioning those that don’t do their job correctly here – what I’m saying is that it is easier to fall into a slump if you have no listings. I asked week after week in my office if anyone wanted to help us do open houses and in an office of over 100 agents, we would never get a response (and these people were not doing great either). There will be agents that will go out of their way to make their business successful and will work way beyond the standard (heck…..I don’t remember the last time I worked a 40 hour week).

    FYI – we just added a team member to Team Miamism that is an exclusive buyers agent and has never worked listings – she was top producer in her office in 2006 and is a go getter and will compliment us nicely. It’s a question of which business is more conducive to long term achievement and non-burn out.

  12. Boston Condo Guy

    August 31, 2008 at 2:58 pm

    Jennifer in Louisville has a good point, regardless of what importance we give to the real estate “sign”, consumers do see them, and recognize the power brands in the area. A significant number of condo developments in Boston don’t allow the use of signs, for understandable reasons, thus making word of mouth and Internet presence more powerful.

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Coaching

Disputing a property’s value in a short sale: turn a no into a go

During a short sale, there may be various obstacles, with misaligned property values ranking near the top, but it doesn’t have to be a dealbreaker!

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magic eight ball

It’s about getting your way

Were you on the debate team in high school? Were you really effective at convincing your parent or guardian to let you do things that you shouldn’t have been doing? How are your objection-handling skills? Can you flip a no into a go?

When working on short sales, there is one aspect of the process that may require those excellent negotiation or debate skills: disputing the property value. In a short sale, the short sale lender sends an appraiser or broker to the property and this individual conducts a Broker Price Opinion or an appraisal, using special forms provided by the short sale lender.

After this individual completes the Broker Price Opinion or the appraisal, he or she will return it to the short sale lender. Shortly thereafter, the short sale lender will be ready to talk about the purchase price. Will the lender accept the offer on the table or is the lender looking for more? If the lender is seeking an offer for a lot more than the one on the table, mentally prepare for the fact that you will need to conduct a value dispute.

Value Dispute Process

While each of the different short sale lenders (including Fannie Mae) has their own policies and procedures for value dispute, all these procedures have some things in common. Follow the steps below in order to conduct an effective value dispute.

  1. Inquire about forms. Ask your short sale lender if there are specific forms that you need to complete in order to conduct a value dispute. Obtain those forms if necessary.
  2. Gather information. Your goal is to convince the lender to accept the buyer’s offer, so you need to demonstrate that your offer is in line with the value of the property. Collect data that proves this point, such as reports from the MLS, Trulia, Zillow, or your local title company.
  3. Take photos. If there are parts of the property that are substandard and possibly were not revealed to the lender by the individual conducting the BPO, take photos of those items. Perhaps the kitchen has no flooring, or there is a 40-year old roof. Take photos to demonstrate these defects.
  4. Obtain bids. For any defects on the property, obtain a minimum of two bids from licensed contractors. For example, obtain two bids from roofers or structural engineers if necessary
  5. Write a report. Think back to high school English class if necessary. Write a short essay that references your information, photos, and bids, and explains how these items support your buyer’s value. This is not something that you whip up in five minutes. Spend time preparing a compelling appeal.

It is entirely possible that some lenders will not be particularly open-minded when it comes to valuation dispute. However, more times than not, an effective value dispute leads to short sale approval.

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Coaching

Short sale standoffs: how to avoid getting hit

The short sale process can feel a lot like a wild west standoff, but there are ways to come out victorious, so let’s talk about those methods:

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short sales standoff

What is a short sale standoff?

If you are a short sale listing agent, a short sale processor, or a short sale negotiator then you probably already know about the short sale standoff. That’s when you are processing a short sale with more than one lien holder and neither will agree to the terms offered by the other. Or… better yet, each one will not move any further in the short sale process until they see the short sale approval letter from the other lien holder.

Scenario #1 – You are processing a short sale with two different mortgage-servicing companies. Bank 1 employees tell you that they will proceed with the short sale, and they will offer Bank 2 a certain amount to release their lien. You call Bank 2 and tell them the good news. Unfortunately, the folks at Bank 2 want more money. If Bank 1 and Bank 2 do not agree, then you are in a standoff.

Scenario #2 – You are processing a short sale with two different mortgage-servicing companies. Bank 1 employees tell you that they cannot generate your approval letter until you present them with the approval letter from Bank 2. Bank 2 employees tell you the exact same thing. Clearly, in this situation, you are in a standoff.

How to Avoid the Standoff

If you are in the middle of a standoff, then you are likely very frustrated. You’ve gotten pretty far in the short sale process and you are likely receiving lots of pressure from all of the parties to the transaction. And, the lenders are not helping much by creating the standoff.

Here are some ideas for how to get out of the situation:

  • Go back to the first lien holder and ask them if they are willing to give the second lien holder more money.
  • Go to the second lien holder and tell them that the first lien holder has insisted on a maximum amount and see if they will budge.
  • If no one will budge, find out why. Is this a Fannie Mae or Freddie Mac loan? If so, they have a maximum that they allow the second. And, if you alert the second of that information, they may become more compliant.
  • Worst case: someone will have to pay the difference. Depending on the laws in your state, it could be the buyer, the seller, or the agents (yuck). No matter what, make sure that this contribution is disclosed to all parties and appears on the short sale settlement statement at closing.
  • In Scenario #2, someone’s got to give in. Try explaining to both sides where you are and see if one will agree to generate their approval letter. If not, follow the tips provided in this Agent Genius article and take your complaint to the streets.

One thing about short sales is that the problems that arise can be difficult to resolve merely because of the number of parties involved—and all from remote locations. Imagine how much easier this would be if all parties sat at the same table and broke bread? If we all sat at the same table, then we wouldn’t need armor in order to avoid the flying bullets from the short sale standoff.

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Coaching

Short sale approval letters don’t arrive in the blink of an eye

Short sale approval letters may look like they’ve been obtained simply by experts, but it takes time and doesn’t just happen with luck.

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Short sale approval: getting prepared, making it happen

People always ask me how it is that I obtain short sale approval letters with such ease. The truth is, that while I have more short sale processing and negotiating experience than most agents and brokers, I don’t just blink my eyes like Jeannie and make those short sale approval letters appear. I often sweat it, just like everyone else.

Despite the fact that I do not have magical powers, I do have something else on my side—education. One of the most important things than can lead to short sale success for any and all agents is education.

Experience dictates that agents that learn about the short sale process
have increased short sale closings.

Short sale education opportunities abound

There are many ways to become educated about the short sale process and make getting short sale approval letters look easy to obtain. These include:

  • Classes at your local board of Realtors®
  • Free short sale webinars and workshops
  • The short sale or foreclosure specialist designations

As the distressed property arena grows and changes, it is important to always stay abreast of policy changes that may impact how you do your job and how you process any short sale that lands on your plate.

The most important thing to do is to read, read, read. Follow short sale specialists and those who blog about short sales on AGBeat, Google+, facebook, and twitter. Set up a Google Alert for the term ‘short sale’ and you will receive Google’s top short sale picks daily in your email inbox. Visit mortgagor websites to read up on their specific policies and procedures.

Don’t take on too much

And, when you get a call from a prospective short sale seller, make sure that you don’t bit off more than you can chew. Agents in most of America right now are clamoring for listings since we are in the midst of a listing shortage. But, if you are going to take on a short sale, be sure that it is a deal that you can close. And, if you have your doubts, why not partner up with a local agent that can mentor your and assist you in getting the job done? After all, half a commission check is better than none!

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