Ripping the Roof Off Real Estate

Thu, 24 Jan 2008 15:08:26 -0500

	Foreword
	Preface
	Acknowledgments
	Disclaimer
	About the Term Realtor®
	About the Author
	Introduction: An Industry with an Identity Crisis
PART 1: THE CURRENT STATE OF REAL ESTATE
	How In The World Did We Get Here?
	The Other Side of the Fence
	I’m Paying You How Much?
	What an Agent Does
	Why a Discount Commission Is No Bargain
	Real Estate and the Internet
	Misleading Real Estate Advertisements and Sensational “News” Stories
	The Unrepresented Seller
PART 2: HOW ABOUT SOME CHOICES?
	What Is Real Estate Consulting?
	How Fees and Hourly Compensation Work
	How About Some Choices?
	Determining What You Need
PART 3: WATCH OUT FOR THE FOUR FINANCIAL POTHOLES
	Pricing Your Home to Sell for the Highest Value
	Navigating Contracts, Disclosures, and Agency
	Negotiating the Deal
	Troubleshooting the Transaction

	Epilogue

Foreword by Ken Deshaies

Thu, 24 Jan 2008 15:42:56 -0500

In 1980, Alvin Toffler published The Third Wave, a groundbreaking book describing how we’d moved from an agricultural economy through an industrial economy and were moving into an economy driven by electronics. He first coined the term “the electronic cottage” as the workplace of the future, emphasizing that many jobs could and would be done from home, that this work/home could be anywhere. I have lived to see this transition, and in fact, have sold homes in our semi-remote mountain communities to people whose corporate headquarters were half a continent away. In 2005, W. Chan Kim and Renée Mauborgne’s Blue Ocean Strategy was published, in which the authors describe how the major business successes over time have come from re-imagining the business at hand. Innovative leaders who could see beyond the ordinary have redesigned normal businesses, and even entire industries, because their vision and knowledge prompted them to seek and implement solutions that had not been considered. From companies such as Cirque de Soleil reinventing the circus as pure entertainment to Curves for Women creating an entirely new fitness environment, brave and courageous innovators have brought creativity, refinement and rich content to our lives. Both of these books were simply observations of reality, but they codified the real world in ways that helped their readers understand better the world around them. Mollie Wasserman’s Ripping the Roof Off Real Estate does the same for the real estate industry that these book did for business in general. Through her observations of the relationships between real estate brokers and their consumer clients, she has created a “blue ocean strategy” and offered it to those in her industry with similar vision. I anticipate that, because it is human nature to resist ideas, the adoption of her model will be slow in the beginning. The first sentence of Toffler’s book is, “A new civilization is emerging in our lives, and blind men everywhere are trying to suppress it.” I expect early responses to Mollie’s model will offer the same blindness. But, since it provides a better – win/win – solution for both real estate agents and their clients, I also expect it to catch on. There has been much written and spoken, online, at conventions, in industry publications, about real estate commissions and the pressures created on them by the proliferation of Internet-savvy consumers, national aggregators and discounters. Rather than take the position offered by many of devising arguments for protecting any standard commission schedule, Mollie wisely suggests offering alternatives. It all depends on who accepts the risk in any transaction. As a consumer, you can ask your agent to shoulder it entirely, share the risk, or take it all yourself. Each alternative offers a different type of compensation, and the selection can be done with open eyes, full knowledge and no surprises. As a Realtor®, I have worked with clients who felt my commissions should be cut because their particular transaction seemed simple. They did not understand that for every successful transaction, there are five where my time was spent unsuccessfully – people change their minds, life circumstances change, or a buyer becomes disqualified. But, the work done for each who did not buy or sell was done for free. Our only payment is on successful deals. Consumers whose goals and abilities are clear, however, can engage a qualified agent for less if they are willing to shoulder the risk of compensation for representation. They can have a choice. And so can the agent. Welcome to the new face of real estate.

- Ken Deshaies, author How to Make Your Realtor® Get You the Best Deal and Get the Best Deal When Selling Your Home Email Ken

Preface

Thu, 24 Jan 2008 15:58:36 -0500

I have a saying taped to my desk, right next to my computer that I look at almost daily:

God, grant me the strength to fight the good fight Not because it’s always winnable, but because it needs to be fought.

There’s not a day that I read this verse when I don’t immediately think of my Dad and how, as I was growing up, he taught me through his example to “fight the good fight no matter the consequences". For the past 12 years as I’ve experimented with different compensation options and a whole new way of looking at my industry, I’ve heard my share of negative comments such as “Real estate has always been paid by commission,” or “This is the way we’ve always done it.” I take comfort in the following absolutes expressed over the years: "This telephone has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us." ---An internal Western Union memo, 1876
"Everything that can be invented has already been invented." -- Charles H. Duell, director of the U.S. Patent Office, 1899
"Who the hell wants to hear actors talk?" --H.M. Warner, Warner Brothers, 1927
"I think there is a world market for maybe five computers." -- IBM chairman Thomas Watson, 1943
Change is difficult and takes time. Changing an entire industry from one where real estate salespeople are paid to move product, to one where real estate consultants are paid to provide counsel, guidance, and care to people looking to buy or sell their largest financial asset is, I believe, a fight that needs to be fought. Is it winnable? Perhaps, but I hold no illusions that the radical ideas that I present in this book are going to be adopted, by either the public or the real estate industry itself, in any kind of big way in the near future. Shoot, they might not be adopted in my lifetime. But, as President John F. Kennedy said so eloquently in his inaugural address when speaking of the many goals he wished our country to reach:

“All this will not be finished in the first 100 days. Nor will it be finished in the first 1,000 days, nor in the life of this Administration, nor even perhaps in our lifetime on this planet. But let us begin.”

About the Author

Thu, 24 Jan 2008 16:11:59 -0500

Mollie Wasserman is the founder of the Accredited Consultant in Real Estate (ACRE®) Course and Coahcing Program, an Accredited Buyer Representative (ABR), an e-PRO 500 (Select 50) Certified Internet Professional, an iSucceed Mentor, as well as one of only 200 Cyberstars™ around the world -- an elite group of Realtors® who generate a significant portion of their business through the use of current technology. A believer in continuing education, she has taken advanced courses and holds a broker’s license. She is also the co-author of: How to Make Your Realtor® Get You the Best Deal – Massachusetts Edition. Mollie has always loved to play matchmaker—identifying people’s needs and finding just the right products or services to match them. She has utilized her unique marketing talents and outgoing personality to successfully represent hundreds of buyers and sellers and assist them in reaching their goals. Her team, The Home Consultants, services over 50 cities and towns in Greater Boston’s western and southwestern suburbs and is affiliated with Keller Williams Realty. Mollie has been at the forefront of real estate technology from the beginning of her real estate career, having designed her first website in late 1995. In March of 1996 MollieW.com (now TheHomeConsultants.com) went online and has since received much national recognition, including being featured in Banker & Tradesman, Forbes.com, Money.com, and the magazine for the National Association of REALTORS®. In 1998, Mollie was profiled in Intel’s research paper on the transformation of the real estate industry and called “the agent of the future.” Her team’s site has also been awarded “Top 10” by the International Real Estate Directory (IRED). She is known as a pioneer in the development of Real Estate Consulting -- an innovative business model that shifts the focus in real estate from sales to consulting, and provides compensation alternatives to commissions. In 2002, she added a new site, MyREConsultants.com, which is devoted to providing consumers with information regarding real estate consulting and fee-based options. Mollie, along with the other members of the ACRE® Council LLC are the developers of an online Course and Coaching program launched in November of 2006, which guides the real estate professional in developing the consulting model in their own practice. Successful completion of this course leads to the Accredited Consultant in Real Estate® (ACRE) accreditation. Mollie is truly multi-geographic, having been born in Florida (of Boston-bred parents) and raised in Texas. She attended school in Florida, Pennsylvania, and Mississippi before coming to the Boston area in 1979. She and her husband Steve live in Framingham, Massachusetts with their two teenage sons, Jeff and Dan, and a very cute Cavalier King Charles Spaniel named Kirby. Mollie holds a Bachelor of Arts in mass communications from the University of Southern Mississippi and a Master of Business Administration with a concentration in marketing from Northeastern University. In her free time she enjoys cooking with Jeff, playing guitar with Dan, and rooting for her beloved Red Sox, Celtics, and Patriots.

Introductory Chapter

Thu, 24 Jan 2008 16:23:00 -0500

An Industry With an Identity Crisis

LISTEN to (or download) the Podcast of the Introductory Chapter.

PART 1

PART 2

READ the Chapter: An Industry with an Identity Crisis

A few years back, my business partner Lisa, mused: "You know, Mollie, I know we've talked about this before, but I'm finding it more and more difficult to get buyers to sign a buyer agency contract. I explain that this agreement will allow me to represent their interest rather than the seller's, but they are still so reluctant."

I nod my head because this has also been my experience over the last few years. It seems that in the age of the Internet, people are getting almost phobic about their privacy as well as being increasingly nervous about making commitments. No matter how it's explained, contracts just seem to scare people. And a buyer agency contract, as Lisa & I explain to potential home buyers, is simply a contractual relationship that puts in writing that the agent must work in the buyer's best interest.

But later on that same day that Lisa and I were speaking, a light bulb went on ...What if the real estate industry has been missing the boat this whole time? What if we have been reading the public wrong? Maybe the real estate consumer isn't at all scared of signing contracts, but rather just befuddled as to whom they are dealing with when they want to buy or sell a home? All of a sudden, I glimpsed what might be going through their minds:

"Who is this real estate agent in front of me? What are they anyway? Are they a salesperson trying to sell me a house, or are they some kind of consultant offering to represent my needs? If they are a salesperson, shouldn't they just be trying to sell me a property? What is all this talk about providing representation? And if they're a consultant whom I'm paying to represent my needs, then why is the amount of their compensation, or whether they get paid at all, wholly dependent on my decision or how much I spend...?"

Ripping the Roof off Real Estate

Thu, 24 Jan 2008 16:28:20 -0500

How a Multi-Billion Dollar Industry Came To Have an Identity Crisis By: Mollie W. Wasserman "No matter how it's presented or dressed up, there is an inherent conflict of interest when a REALTOR® is expected to act as a fiduciary agent providing objective, unbiased counsel to clients, while at the same time being paid by commission. This unspoken reality, combined with a lack of choices in the real estate services offered and how they can be paid for, is the elephant in the room. The real estate industry knows it's there because the consumer keeps pointing to it, but no one wants to acknowledge it and certainly no one wants to talk about it. UNTIL NOW. "

- From Ripping the Roof off Real Estate

Available in all major book stores. Or order online at Amazon or Barnes & Noble.
"For real estate professionals who are defending their commissions against the government, consumer groups, and third-parties that want to change the industry while making consumers take on more work and liability, and for consumers who no longer know who or what to believe, Ripping the Roof off Real Estate spotlights the real estate issues that affect each of us."

- Blanche Evans, editor, Realty Times, author, Bubbles, Booms, and Busts: Make Money in Any Real Estate Market

"Mollie knows the real estate business point-blank. By sheer focus on consulting with clients rather than selling to clients, she operates at the highest fiduciary level--consulting, advising, negotiating, and troubleshooting."

- Gary Keller, Founder and Chairman of the Board of Keller Williams Realty International and best-selling author of The Millionaire Real Estate Agent and The Millionaire Real Estate Investor

"Occasionally a book comes along that is singular in its achievement of creating possibilities. This must-read book does that, by detailing to real estate professionals how they will earn greater financial, economic, and business rewards by giving the real estate-buying consumers what they've wanted for years: choices on how to pay, without fumbling with discounters."

- Allen F. Hainge, founder, The Allen F. Hainge CyberStars®