Recently in The current state of the real estate industry Category

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http://realtytimes.com/newsfiles/realtimes2.nsf/rtpages5.1/20110617_seven.htm

Most agents don't have a quick test to see how they are doing in their business. They don't have a series of numbers to use that show them the health and prosperity of their business. You must realize and accept that sales is a margins game. The margin is between the investment of resources, time, and capital with an expected return in money and satisfaction. We need to have a vehicle we use to test the margins easily and effectively. Why I developed the seven key numbers in a real estate agent's practice was because so many agents struggle to control their business, control their time, and control their money with the outcome of a controlled quality of life.

by Dirk Zeller

As anybody who has every planted and raised a garden can tell you, getting from a freshly tilled plot of land to a bountiful harvest is no easy task. Apart from the ongoing need for a kind balance of rainfall, sunlight and other cooperation from Mother Nature, gardening also requires a certain level of diligence to make sure that weeds, insects and other forces working against a successful harvest are kept at bay. The bottom line is that if left to its own, any garden can become an overgrown weed patch before long.

My point is that a successful garden comes about as the result of careful planning, diligence and an understanding of best practices. The same thing holds true for real estate.

In real estate, as in gardening, there are those things you can control and those things that you can't. The secret to success is to not only recognize which is which but to find solutions to problems before they crop up. Let me give you an example:

I was reading a blog that vividly described the distress caused by residential mortgage foreclosures. The reader could readily envision foreclosures frustrating plans, shattering dreams, creating tensions in homeowners and threatening relationships with those the homeowners love.

The column attributed the tragic developments to lender greed and government ignorance. The defaulting lenders appeared to be passive victims of others' vices and the system's failure to protect them.

By: Glenn Freezman
Nucazza, LLP

As you may already be aware, a number of new 'rebate' models have crept into the real estate market during the past few years. Driven partly by a weak market, the vast majority of these programs are aimed at enticing buyers to work with brokerages by offering heavily discounted closing costs. In some ways the rebates are little more than marketing tools that are being used to bring in new business by floating out a strong unique selling proposition (USP) to help those brokerage stand out from the crowd.

A must-read for all those interested in the topic of real estate compensation: A new article in Inman: Conflict, confusion and risk in real estate commissions.

Up and above the fact that the author interviewed yours truly for the article, (and actually didn't misquote me!), I think she does a really good job in bringing in lots of ideas and opinions on this topic. Check it out!

Imagining Real Estate Without Realtors, Glenn Freezman, Nucazza, LLP

About 20 years ago if I needed to travel on a business trip it was an easy task-I just called my travel agent told her what I needed and let her do all the heavy lifting. And why not? The job got done and it didn't cost me any extra (or so I thought at the time).

Today, getting on an airplane is largely a DIY process. The tools are intuitive, the rates are competitive (and I'm not paying that overhead that was traditionally used to pay the agents and at the end of the day what's most important to me is that I was able to get on the right flight and not who got compensated for getting me there.

Should Realtors Get Paid for Their Time

Glenn Freezman, 5.9.11

You know those TV shows that have the disclaimer at the front saying that the following may not be suitable for all audiences, etc.? Well perhaps today's blog posting should have such a disclaimer.

It's not because I plan to do anything offensive for highly controversial. Instead it has to do a little back of the envelope calculating the help assess your value as a Realtor - and that may put you in a bad mood.

ACRE® Industry Partner Jennifer Allan wrote a great post on Active Rain: "No I Won't Reduce My Commission! Do You Expect Me to Work for FREE?" (Um, let's do some math)

A couple of ACRE®s have already added to over 100 comments on this blog. It's amazing  however, how so many of the comments miss the point that Jennifer was making - she isn't advocating cutting one's fee. She is questioning how a system that bases compensation on the value of a home fairly compensate you for your time, experience and expertise.

Thanks Jennifer for sharing your wisdom - as usual, you are spot on!

How much does the 'price of doing business' affect how much you spend on your next home? Probably more than you think! Can you get MORE HOME FOR LESS MONEY

You remember those reasoning problems you used to work on in school? Here's one for you to tackle:

Let's say that you're looking to buy a new car. After doing research and checking the buying guides you finally settle on a model that is just perfect for you. You head on down to the local dealership for a test drive and when you get there, one of the salesmen agrees to show you the car and let you take it for a spin. After returning from your drive you make the decision to buy the car and start to negotiate the price of the car with the salesman. While the car is listed at $20,000 the salesman tells you that he needs to add an additional $5,000 to the final price to cover his time working with you. After all, if it hadn't been for him, you wouldn't have been able to test drive the car, now would you?

So here's the question: How long would it take you to walk out of the dealership?

The Value, The experience and The knowledge that Realtors bring to the table shouldn't be discounted. During the past decade, more and more prospective home buyers have started taking advantage of the information and tools that are available to them on the Internet -and why not? The abundance of sites and information that allows home buyers to thoroughly do their homework before even stepping into a home on the market is tremendous For example, prospective buyers can now virtually tour dozens of homes by looking through photo slide shows, virtual walk-throughs and tools like Google maps, which allows buyers to virtually wander through the neighborhoods or view entire neighborhoods. Overall, it's a pretty easy way of getting the skinny on any house on the market before you decide to go and see it for yourself.

From a buyer's perspective, this access to all of this information and capability often questions the value of paying a Realtor for these services if you can do them yourself. After all, why should they end up paying a Realtor® a high commission when they can do most of the legwork themselves?

From the buyers standpoint this value equation seems to makes sense. However, from the standpoint of what buyer's agent actually does that leads up to the closing, it's a great deal more than being an on-demand tour guide for people looking for a home.

A new Inman report that just came out: A New Decade in Real Estate. The report is based on a survey of Inman readers that got over 500 responses.

The report is fascinating: especially Part 1: The Future of Real Estate Fees. When asked what will change the most about real estate compensation, the largest share of respondents - 40.4 percent - said that fees will increasingly be based on the consumer's selection of services by the year 2020. Additionally, 17.4 percent of respondents said that brokers will increasingly charge a flat fee for real estate services. So, more than half of respondents (57.8 percent) believe that real estate services will increasingly be fee-based in the next 10 years!

I get this question asked ALL of the time from my past and future clients. So here I will share with you my 30 years of wisdom on this topic.

I started in real estate in 1979, with the great S & L bailout, mortgage rates in the double digit figures, no MLS, no internet, no company training, lol...what WAS I THINKING??!! To make the matter worse, I was 21 but looked like I was about 15 (ahhh, wish those days were back!). So, I quickly learned that if I was going to 'make it' in this cut throat business, I needed a leg up on all the other experienced agents.

After getting my real estate license, I got my mortgage brokers license because that was in the day that mortgage officers only worked Mon - Fri, 9-5. I wanted to know evenings and weekends how to prequalify a buyer.

Next I went on to take appraisal classes in order to accurately assess a property value. Then, I went to hang out with a Title Company office, so I could fully assess what happens from start to finish in a real estate transaction. I also tagged along with a home inspector, termite inspector and I took as many classes as I could on negotiations, contracts, law.

SO drumroll please ;-) ...... Here is what I've learned in 30 years and will share with you about the BEST time to buy or sell a house. let's start with the best time to buy.

A couple of days ago in an article for Inman News entitled "Realtor® Ranks Swell but their Pocketbooks Don't", Glen Roberts reported what we agents already knew: that despite the huge increase in housing prices over the last ten years with the accompanying public perception that agents are making gobs of money, the truth is quite different.

In actuality, Realtor®'s median income was down 3.2% in 2006 compared to 2004, while their 2004 median income had dropped 5.6% from 2002. Roberts quoted Chang-Tai Hsieh, an associate professor of economics at University of California, Berkeley, who said that the median-income drop for Realtors®

"is clearly driven by the fact that there has been excessive entry in the last two years. You would expect to see some exit in the near future, but as soon as housing prices pick up we're going to see more entry and then that's going to drive down (income)."

One of my goals in writing my book "Ripping the Roof off Real Estate" as well as in developing the Accredited Consultant in Real Estate (ACRE)™ course for agents is to see the real estate industry evolve similarly to how the financial industry did 20 years ago.

This past Sunday, the cover article of Parade Magazine was entitled "Do You Have a Better Idea?"  The article talked about how solving problems can be accomplished by simply looking at the issue at hand and "thinking out of the box". From the "Forever Postage Stamp" to increasing the supply of organ donors, the article offered many examples of how we can devise simple solutions to big problems by simply borrowing an idea from another country, industry, or context and applying it to a problem.

A similar point was made by my colleague and friend, Ken Deshaies, in the foreword of my new book "Ripping the Roof off Real Estate". Ken noted that the authors of the book "Blue Ocean Strategy" described how major business successes over time have come from innovative business leaders re-imagining the business at hand.