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Which is Better: a Home Buyer or a Home Seller?

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It probably depends on your point of view.  Are you looking for a quick nickel or a slow dollar?  Do you want a job or a business?  How about in “this market”?  Isn’t it better to have a buyer than a listing now?

I’ve written before that my expertise is in getting and getting rid of listings.  In some of those posts I’ve seen comments to the effect that I forgot to mention working buyers.  I didn’t forget.  To sell a house you need a buyer.  Each time and without exception.  It just goes with the territory.  But if your goal is to have a long-term stable business then you are going to want to learn to list.  Period.  If you disagree – even a little bit with anything you’ve read so far, please do yourself a favor and set aside those disagreements and read on.

The biggest single barrier to increased production is FIXED IDEAS.  We all have them in one area or another.  You have certain ideas about “how much business is possible”.  Those “logical thoughts” are the very thing holding you back.

Is is easier to get a buyer and sell them a house than it is to take a salable listing?  The correct answer is yes.  If this were not a true statement new agents wouldn’t have a prayer of ever getting any business.  Reason?  Buyers are seldom ever looking for an agent.  They are looking for a house; they are willing to tolerate talking to an agent in order to see the house.  Most buyers are almost never “shopping for an agent”.  If you wanted to buy a car can you imagine saying to your partner, “I sure hope we meet a charming and fun car salesman today.  Someone who is a lot of laughs we can really bond with.” 

Sellers are different.  Most of them are looking for an agent to hire.  Totally different mindset.

Why does it take more skill to list than to work buyers?  Simple: because you don’t have to ask the buyer to pay you.  It is a “free” service you are offering to them.  The seller is going to give the listing agent a high enough commission that there is a paycheck for both agents.  It is the listing agent who goes in and gets that agreement signed.  Please understand that I am not saying it is “harder work” – because it isn’t.  In fact, it is a lot easier work, with no heavy lifting of any kind.  But that isn’t the good part.  Lets pretend that your goal was to do as good and as efficient a job as possible and to make as much money in the same amount of time.  Just pretend that with me.  How many buyers can you work at once?  Without help and if you are amazing?  How many at the very same time?  Two?  Three?  Could you juggle 4 or 5 at the same time?  And keep doing all of the necessary actions to have 4 or 5 more for next week because you will sell all of the ones you are working with right now?  Could you keep doing that week after week?  Month after month?  Year after year?

I don’t think so.  I’ve seen one agent here in Phoenix do around a hundred buyer sides a year for 2 – 3 years (without meaningful help) before hitting the wall.  Finally a heart doctor told him he was going to have to slow down.  The best buyer agent I’ve ever seen or heard about (he had a remarkable system for working buyers) did (with help) about 500 buyer deals the year before last.  This year he isn’t even in his companies top 10 agents.  (Hint: none of his companies top 10 agents are doing 500 deals this year).  Am I saying one can’t make money working buyers?  Nope.  What I am saying is that I personally know (or at least know of and what they are doing) most of the top agents in North America.  The pattern for almost all of them who enjoy long-term stable success is they have a listing based business.  Even though most of them do about as many buyer sides as they do seller sides, their businesses are listings based. 

Do you have to have a listings based business?  No, you don’t.  One of the wonderful things about this business is you can set it up any way you want to set it up.  Further, you can change it anytime you feel like it.  My first 12 years in the business I primarily worked buyers.  I “took listings” but wasn’t very successful at actually selling most of them.  The only meaningful thing that separated me from the pack was I continued to know that I was an incompetent dolt on the subject of taking listings.  I didn’t figure out explanations of how it was “better” to keep doing it my way.  I knew there was something to know that I didn’t know yet.  Was it hard for me to figure out?  Well, yes and no.  The biggest obstacles were the stupid (anything I believed that was unworkable) ideas I had about how it should be done.  If an idea is really “right” that “rightness” is easily tested: it works.  Again and again and again, without variation.  My own fixed ideas were what got in my way.  If you think you already know all about something there would be no good reason to then work on finding out about it.  You already know.  Once you know you don’t know you then can actually know – or at least start to know.  So one has to first come up to not knowing.

Nothing about the subject or learning it is complex or difficult.  Like most subjects, this one too, just reeks with false data and moron ideas.  Our industry is chock full of people who don’t do it or never did it who (for only X dollars) will tell you how to do it.  But it can be done and (if you want) can be done by you.  I’ve written all about it here.

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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44 Comments

44 Comments

  1. Jim Gatos

    July 14, 2008 at 6:00 am

    Russell, with your post, you’ve validated the fact that you need to list to last. No one can expect to get buyer traffic just because Trulia and Zillow have the listings on their sites too. The ONLY Probable ways a buyer will go to a buyer agent today is either referral or discount. However, even though we are flipping to an internet based business now, it is still THE LISTING AGENT that gets the calls and the buyers, that’s why a lot of buyer agents work with Top Listing Agents. Buyers won’t go to “just another pretty face”…. I never had a buyer call me and say “Oh, I just LOOVVVE your website”, or, “you’re sooooo cute, you just HAVE to be my buyer agent!”.. Nope, never had that happen. I did have ONE seller LIst their home with me, and when I asked her why, she said, to paraphrase her… “Well, you seem to do a lot of business, and you are cute”.. I hope she was kidding.. I did sell her properties, though..

    Jim

  2. Ken B.

    July 14, 2008 at 6:18 am

    Amen brother, nicely said. As a Sales Manager, I employ a bandeleero of strategies and tactics to motivate and communicate the urgency of listings, I hope you don’t mind if I enlist, point and shoot your savvy?

    The quote that pops into my head, “Familiarity Breeds Contempt.” I’m not saying my agents hold me in contempt, but after the constant drone of a familiar voice (mine), your perspective, and well told story will add some welcome sizzle and substance to my drum beating. I’ll point a soon to be written blog post towards this post.

    Thanks for sharing!
    kb

  3. Mack in Atlanta

    July 14, 2008 at 7:02 am

    In todays market, having both buyers and sellers is the way to go. I agree that to have stability you need sellers, but for that additional push buyers provide a little quicker income source.

    @Jim Gatos – Buyers are finding their way to many agent websites via the search engines and the listing agent is not necessarily getting those leads. By making all the listings in your area available on your site and properly promoting your site to the search engines you can get as many leads as the listing agent if not more. This past weekend I showed an Owner/Agent listing. When the agent called me for feedback we discussed the market a bit. She has 16 listings which are sitting still and she gets no traffic (leads) from her website. A local agent here in the Atlanta Market consistently makes over $500k annually and does not carry a single listing. (Not the road I choose to travel but it does work)

  4. Curtis Reddehase

    July 14, 2008 at 9:15 am

    We have learned that with technology you do not need the listings to get buyers, so one can simply chose what clients they would rather work.

  5. Jonathan Dalton

    July 14, 2008 at 10:03 am

    We may have the ability to choose, but the amount of work needed by the two camps is decidedly different. For the seven houses I’ve gotten into escrow the last seven weeks, two were my own listings … though there’s been a lot of work over time, they took substantially less time, gas, effort than the buyers did.

  6. Jim Gatos

    July 14, 2008 at 10:14 am

    Generally speaking, I will work with a buyer and I don’t mind, but like anything, I stay away from unmotivated, unfaithful buyers, and unmotivated, overpriced sellers.

    The above may be the key to it all….

  7. Barry Cunningham

    July 14, 2008 at 11:10 am

    “The biggest single barrier to increased production is FIXED IDEAS. We all have them in one area or another”

    You left me to ponder on this one. It has taken about 5 months..but we actually agree on something.

  8. Dylan Darling

    July 14, 2008 at 11:18 am

    The internet is slowly changing things. I think a buyer’s agent can survive if they have a great website with good rankings and a good system to follow up with leads. I think finding the balance between listings and working with buyers is key. If I have to many listings, I don’t have enough time to work with all of my buyer leads. If I don’t have enough listings, I don’t have as many opportunities to meed buyers.

  9. Sue

    July 14, 2008 at 11:42 am

    I am happy to work with motivated, loyal buyers and motivated sellers. Listings need to be priced right or the seller must be open to reduction (quick) if the want to start high. In my opinion, if the home is way over priced, the process will drag on and its likely not to end on a good note. Overpriced listings are alot of work with no reward unless you end up getting some good leads from them. I am very honest and upfront with my sellers about pricing. I’d rather be the second agent in at the right price if necessary.

  10. Bob

    July 14, 2008 at 12:38 pm

    “The ONLY Probable ways a buyer will go to a buyer agent today is either referral or discount.”

    Nothing could be further from the truth. I sent out 12 buyer leads to two agents this morning. Next closing is an online buyer. No discounts involved.

    Controlling inventory is still the best long term strategy though. Doing both is better.

  11. Elaine Reese

    July 14, 2008 at 1:02 pm

    I LOVE my sellers! With them I have greater than a 95% chance of getting paid. My sellers are loyal, plus, they are so appreciative of my hard work. We work as a team. As a single agent, I can handle more listings at a given time than I can handle buyers, who take much more time. Lastly, since my degree is in Marketing, the things I do for sellers are the tasks I enjoy doing.

    The buyers I do work with tend to be my sellers. I really don’t work with relocating buyers who want me to be tour guide for the weekend only to find out they decided to not take the job afterall. I don’t find that fun and the ROI is terrible.

    List to last!

  12. Holly White

    July 14, 2008 at 1:25 pm

    @ Jim – Thank God what you wrote is not completely true and only an opinion or we would be hurting right now (temporarily of course). We get several leads a day in from buyers who found our site to be informative and helpful….enough so that they decided to contact us and not the listing agent.

    I do agree with Bob though… “doing both is better”

  13. Jim Gatos

    July 14, 2008 at 2:04 pm

    @Bob…

    You said… “I sent out 12 buyer leads to two agents this morning.”

    In other words, you “referred” 12 buyers to two agents this morning…

    I said… “The ONLY Probable ways a buyer will go to a buyer agent today is either referral or discount.”

    “or”.. I didn’t say “and”.. I said “or”..

    Thank you for proving my point!

    Jim

  14. Dan Connolly

    July 14, 2008 at 2:08 pm

    Well I have had lots of people tell me that they love my website and want me to work with them to find a house. I always have 10-12 listings but the buyers are floating my boat right now. I think anyone who dismisses buyers is pretty short sighted, virtually every sale has one Seller’s agent and one Buyer’s agent. BTW Many of the buyers I sell only look at one or two houses.

    The measure of success isn’t necessarily the number of transactions you are involved in. The number one agent in the Atlanta market for years did around 7 figures in gross commissions but only had about twenty sales a year.

  15. Jim Gatos

    July 14, 2008 at 2:08 pm

    @Holly… Most, not all, but Most of the “online” buyers I run into seem to have this perception that’ll I will work for next to nothing. Not all, but most.. I agree, though, that I try to be very informative and that I usually wind up saving them more money than what they would’ve gotten from a measly commission discount. Now, now, I said “usually”, not “always”…

  16. Bob

    July 14, 2008 at 2:54 pm

    No Jim, I did not prove your point. Those are MY buyer agents I dispensed the leads to and those buyers came from my site. I took the buyers I wanted. They got the overflow.

  17. BawldGuy Talking

    July 14, 2008 at 6:21 pm

    I’ve been living what Russell wrote here for a long time. He’s dead on, and there’s simply no debate. He’s NOT saying you can’t make a healthy income working exclusively with buyers. He’s never said that, and I suspect he never will.

    He’s saying a ’58 VW will get you from Phoenix to San Diego fine. But his Corvette will get him there much faster.

    Ask yourself: Would I rather have 30 listings or 30 buyers.

    My experience shows overwhelmingly agents who say buyers, fall into a couple categories. 1) They don’t have either the skill set to list, or they’re deathly afraid of rejection. 2) They realize they fit into #1 but are in perpetual denial.

    A listing agent, again generally speaking, will have a significantly larger and more stable income over time, working 40/hr weeks, than a buyer’s agent working 60/hr weeks.

    Also, and this is no doubt a sensitive point — listing agents don’t need buyer’s agents whatsoever. Buyer’s agent’s can’t exist without listing agents.

    What Russell is sayin’ ain’t much different than saying if we all jump from a roof we’re gonna fall down, not up.

    The next time you see a buyer’s agent do several hundred sides a year for five years or more, will be the first time.

  18. Mike Farmer

    July 14, 2008 at 7:38 pm

    jeff, are you talking about a “team” or an “agent” doing several hundred sides for five years or more?

  19. Mike Farmer

    July 14, 2008 at 7:50 pm

    This is a specious argument but it will take too long to say why — it’ll give me something to do tomorrow on Bonzai. It’s also a patronizing article, although I’m sure it’s unintentionally patronizing – most likely it comes from a “fixed idea”. I will address it fully on Bonzai.

  20. BawldGuy Talking

    July 14, 2008 at 7:51 pm

    I meant an agent, but you bring up a great point. Do you know a team who doesn’t list, but has done 4-500 sides yearly?

  21. Mike Farmer

    July 14, 2008 at 8:24 pm

    I doubt there are very many agents period, listing or buying, who do several hundred sides five years running.

    It depends on the size of the team. Our team of four exclusive buyer agents (under my old broker) did 230, and this was without assistants. If the team had been 8 (assuming the same level of talent) we would have done 460.

  22. Bill Lublin

    July 14, 2008 at 8:50 pm

    Sorry to come late to the party, and maybe I’m showing my age, but I think that Russell makes an important point, as does @Bawldguy –

    When you control the product, the buyers will find yu even in a slower market. The key is listing property well, not just listing property.
    .
    Like Russell, I was not a good lister when I started, and found working with buyers much easier. I liked showing houses, and meeting new people and the money was faster. But after a while I found that I had no more time to work with buyers because it was just harder to manage a number of buyers then it is to manage the same number fo listings.

    As Bawldguy said “”A listing agent, again generally speaking, will have a significantly larger and more stable income over time, working 40/hr weeks, than a buyer’s agent working 60/hr weeks.”

    And of course as a listing agent, there is always the opportunity to earn a larger commission by selling your own listing to a buyer who chooses not to be represented, or, if it fits your business model acting as a disclosed dual agent or trandsaction licensee if such an option is available in your state.

    Now I’m not saying that buyer’s agents don’t provide an important service, however Bawldguy puts it very well when he says:
    “Also, and this is no doubt a sensitive point — listing agents don’t need buyer’s agents whatsoever. Buyer’s agent’s can’t exist without listing agents.”
    While buyer’s may choose a buyer’s agent for his knowledge or demonstrated expertise, they are really driven by their desire to get to the product – and the product is controlled by the listing agent –

    I will also tell you that the most succesful salesperson I know personally in my area, created his outstanding sales achievements by concntrating on becoming the “go to guy” in just 5 condominium developments in Center City Philadelphia – setting records for sales as an individual that ar estill outstanding. And he did it by controlling the listings. And (as Russell points out) the sales followed..

  23. Sue

    July 14, 2008 at 8:58 pm

    You may be late, but you make a Grand Entrance! Excellent, on target points.

  24. BawldGuy Talking

    July 14, 2008 at 9:10 pm

    Dad was a lister. His ‘team’ did 1,000+ sides four years runnin’ before he got bored and retired.

    OK Bill — second round in SF is on me. 🙂

  25. Ken Smith

    July 14, 2008 at 10:59 pm

    BawldGuy I don’t think it’s a one or the other question. Personally in any market I would rather have a balance of transactions. So sign me up for 15 buyers and 15 sellers. Now that happens to mean that we market for sellers, then market the listing which in turn generates buyers.

  26. BawldGuy Talking

    July 14, 2008 at 11:23 pm

    Ken — Notice you said ‘market the listing’. No listing, no sale. The buyers are attracted to the listings. The point is, the lister makes more money in less time, year in, and year out. It’s the way it is. The buyers naturally flow to him, if indeed that’s what he desires. The buyer’s agent’s task is more calculated — they must rely on others’ inventory to succeed. That’s something they don’t like to hear, but true nonetheless.

    Don’t think so? I’ll use Dad again. The local Board/MLS tried cajoling, bullying, and booze to get him to join the MLS and share his listings. He didn’t need them, they needed him. Nothing’s changed.

    If maximum income isn’t the agenda, then you’re right, it isn’t a ‘one or the other’ question. If it is, the buyer’s agent(s) are exhausted and have less money. I repeat — show me the buyer’s agent who has the time to do the same number of sides per time period as a lister. Ain’t gonna happen.

    I agree with you though — having both sure makes life more enjoyable.

  27. Ken Smith

    July 14, 2008 at 11:34 pm

    Also keep in mind to me the work is actually less for a buyer as I am not the one running around with them, keeping up on the file, going to the closing. I just generate the lead and had it over the my buyers agents. With a listing I actually still go on all the appointments and deal with many of the clients directly.

  28. BawldGuy Talking

    July 14, 2008 at 11:43 pm

    Ken — Somebody’s doing the work, beginning with schleppin’ them around ’till they find the ‘perfect’ home. Tick tock.

    What about the team with multiple listing presentation experts. What team would you rather lead? What bank account would you rather have?

    Closings? I’ve been a lister since Nixon was in office and the next closing I attend will be the first.

    Dad’s ‘team’ was a listing team. The guy made over $400,000 a year in the ’60’s for Heaven’s sake. The average side was worth about $5-600.

    A buyer’s agent competing with a listing agent on an even playing field is comin’ to a gunfight with a rubber knife. 🙂

  29. Mike Farmer

    July 14, 2008 at 11:58 pm

    No doubt, your father was an incredidly successful agent. Tow Whatshisname who created The Buyer Agent in Memphis was posting those kind of numbers in buyer agency in the mid 90s, but they are both anectdotal cases of individual successes. What Russell wrote is something different, so I will be answering that.

  30. BawldGuy Talking

    July 15, 2008 at 12:05 am

    Mike — 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.

    Dad was indeed incredibly successful, but he wasn’t the Lone Ranger by any stretch of the imagination. I will grant you he was well ahead of his time back then. By the time they figured out listing agents dominate, it was too late for them. 🙂

    Am I all wet, Russell?

  31. Ken Smith

    July 15, 2008 at 12:06 am

    Jeff in as we both know real estate is local and attending closings is just one of those local quirks that is expected around here.

    As for which is more profitable long term buyers or sellers I don’t think that we disagree, just currently it happens to take less of my personal time to deal with buyers then sellers. Over time this will change, but can only take one step at a time.

  32. BawldGuy Talking

    July 15, 2008 at 12:15 am

    Ken — You’re right about closings. My bad.

    Man, as the leader of your team, you have it made in the shade. I greatly admire and respect the machine you’ve created.

    What are your plans for when the ‘normal’ starts coming before the word ‘market’?

  33. BawldGuy Talking

    July 15, 2008 at 12:20 am

    As I’ve said so many times recently, Mike Farmer has been exploring new concepts in real estate teams. Of all the folks I’ve followed, Mike and Sean Purcell are the two who’ve convinced me teams haven’t seen all of what’s possible.

    I can’t wait for MIke’s take on all this. Also, I’d love to hear from Sean Purcell on the whole buyer vs listing approach as it relates to ‘team’.

  34. Ken Smith

    July 15, 2008 at 12:30 am

    Jeff I am looking into opening my own office. Then expand the team and move into a true rainmaker position. Want to be in position to have the doors open by early next year. The move is more about control and keeping more of what is earned then anything, but also will be looking into adding agents that generate their own business.

    I didn’t create the machine,not that smart. Was just smart enough to ask other successful agents how they got there and put my ego to the side and copied their businesses. Have talked with enough of the top agents to know that there really aren’t any secretes in this business. Someone has done what you want to achieve and most of the time they will freely share that information.

    As a side note I don’t have a clue what a “normal” market is. Have gone from bad to great to awful in my time as an agent. Nobody ever feels the market is just “normal”. Personally I have been able to make an above average living in every market, but this year has proven to be the biggest challenge due to continued financing issues. If we can just get back to a more normal lending market then the rest is immaterial IMO.

  35. BawldGuy Talking

    July 15, 2008 at 12:44 am

    Ken — Couldn’t have said it better. In fact, in the same spirit, I’ve often called myself ‘Japan’, ‘cuz I copy successful practices whenever I see them.

    Sounds to me as if you’ve figured it out. Now I have someone else to follow. Before you know it, I’ll be unashamedly copying your team.

  36. Dan Connolly

    July 15, 2008 at 12:49 am

    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.

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

    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. 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.

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

  37. Russell Shaw

    July 15, 2008 at 1:43 am

    >>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 25 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 couple of people who beat me (in both volume and units) who only had one assistant. https://www.realestatejournal.com/adinfo/res/20071113-intro.asp I don’t know of any high volume 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: http://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.

    >>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 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. 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 post.

  38. BawldGuy Talking

    July 15, 2008 at 1:57 am

    Dan — Glad to finally have someone join this conversation with such a high tone. Then there’s the bonus of humility you bring to the table. Before I begin, and ‘cuz this isn’t BHB or my own blog, I’ll say this carefully. And I’m not speaking in any way, shape, or form for Russell. He does just fine for himself.

    Oh, and by the way Dan, Dad’s sales? 100% double ends without one single exception in the four year time span mentioned. Ever. There were all kinds of ‘Dans’ in his orbit too. Said he needed them. Time showed them to be walking/talking punch lines to the old joke. You know the one. ‘What came first, the listing or the buyer’s agent?’

    I’m NOT denigrating buyer’s agents. I represent buyers all the time. In fact, ‘cuz of my local market, I haven’t listed a property since Bush’s first term. So since I are one, I like them.

    I didn’t say what you said I said. I said listing agents don’t need you, an outside buyer’s agent.. And I stand by that. What I said was, buyer’s agents need listing agents to exist. Listing agents don’t need buyer’s agents whatsoever. Are you selling shoes or houses? Russell lists houses. These houses are then shown by other agents representing buyers. There’s a chronological order there that kinda sorta gives this whole debate a cartoonish feel about it, don’t ya think?

    What that means is they don’t need you. They can opt to allow you to show their listings if they choose. A team whose foundation is listing, can sell all their listings without having to deal with you ever. Go ahead big guy, tell me I’m full of crap.

    It was guys like you who tried in vain to force the most successful listing operation in town to cooperate with them. They needed that team’s inventory. He didn’t need their buyers though, so he told them to go fish. He had HIS OWN buyer’s agents on his team. Tuns out all those bully buyer’s agents were the ones full of crap.

    So Dan, load of crap? I’m gonna print your comment, shred it, then spread it on my lawn tomorrow morning. I’m gonna water it a few days. This time next week I’ll have the greenest lawn in the neighborhood.

    Buyer’s agents can’t even begin to make a living until the listing agent does his job.

    Buyer’s agents survive at the listing agent’s pleasure. Nothing says they have to like it. They can even deny it. But until there’s a listing signed, there’s nothing for that buyer’s agent to do but tell listing agents what they’re saying is a load of crap.

    Now, once Russell lists that house, THEN the buyer’s agent can show it and earn a living.

    When escrow closes they can only hope Russell does it again — or they will indeed be sellin’ shoes

    Load of crap my…..

  39. Russell Shaw

    July 15, 2008 at 1:57 am

    My goal here was not to insult anybody. I apologize if what I wrote came across as insulting.

    >>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 25 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 couple of people who beat me (in both volume and units) who only had one assistant. https://www.realestatejournal.com/adinfo/res/20071113-intro.asp I don’t know of any high volume 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: http://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.

    >>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 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. 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 post.

  40. Dan Connolly

    July 15, 2008 at 9:19 am

    Russell, Actually Russell my statement about superiority was directed to Bawld Guy more than you, I really haven’t gotten that from your posts. But your statement about my business being listing based misses one vital point. I don’t use my listings to find my buyers. In fact I think it is unethical for me to try to convert a sign call to a buyer. Why? Because they called and expressed interest in one of my listings. I don’t think my seller would be happy to know I was asking them if they saw the house priced less on the next block! Even if they tell me this is out of their price range, I know that buyers lie and maybe if they don’t find anything else they will decide to spend more and come back. All of my buyers come from other sources and lately that is generally where I go to closing.

    Bawld Guy- I still think its a load of crap. BTW I did exclude your Dad in my post, but I think he is an anomaly. That is really more of a discussion about MLS vs no MLS. The buyer’s agents on his team were still critically necessary to his success.

    This may be like splitting hairs, but it is possible to sell homes without listing agents (how about FSBO’s, preforeclosures advertised in the legal journals, HUD homes, or when you get a buyer who has to live in a certain subdivision and you send a letter to all of the homeowners, or when you just happen to know someone who has a house that perfectly meets your buyer’s needs and you give them a call….) What I am saying is yes, obviously shoe salesmen need shoe manufactures in order to sell shoes, but shoe manufactures also could also not survive (for long) without shoe salesmen. It is a symbiotic relationship.

  41. Paula Henry

    July 15, 2008 at 9:38 pm

    I had a coach once, who said, “Real Estate is the only (sales)business where you have someone else selling your inventory”. Why would you not want to be a listing agent?

    I still work my share of buyers, and find it is a good balance. Being out with buyers sheds light on what they want, how they think and how they respond. You can’t get that type of knowledge without being out with the buyer.

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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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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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