Tuesday, July 30, 2013

What is full service in real estate? Do you get what you pay for?

Consumers intuitively know what ‘Full Service’ in real estate means:
  • Expertise/Consultation (preparation for sale, pricing, planning, staging)
  • Marketing (which might include MLS, Internet, Open Houses, advertising, signs, flyers, etc)
  • Representation/Negotiation (weighing offers, avoiding mistakes, anticipating next steps)
  • Transaction Processing/Problem Resolution (making sure everything is done properly, handling problems as they arise)
The problem is that almost everyone in the business – traditional percentage-based brokers, discount brokers, flat fee brokers, fee for service brokers and so on – claims to do all of those things!  The only brokers who might admit to NOT doing some of it would be self-described ‘Limited Service’ brokers or ‘MLS Only’ brokers.
With so many different kinds of brokers laying claim to  ’Full Service,’ the term becomes  meaningless . . . except that consumers don’t realize this.
In the muddled mess of real estate company marketing, they have come to believe that  ’Full Service’ must also mean ‘Full Commission.’
>>>(and therefore, less than full commission means less than full service)<<<
Of course, nothing could be further from the truth.
If your less-than-full-commission offering is based on a better, more efficient business model that enables you to be profitable while charging people LESS . . . then the debate is not about the level of service, it’s about how much the consumer wants to pay to sell a house.   And here’s a news flash:  s/he wants to pay as little as possible to get the job done quickly, efficiently and effectively.
At Help-U-Sell Bay Beach Realty, we charge LESS because our business model is more efficient.  And even though we charge LESS, we make MORE than our percentage based competitors because of this efficiency.
That can be a frightening proposition to ordinary brokers stuck in the old percentage based commission prison.
On the defensive, the ordinary broker sometimes spreads false rumors about us.   When Suzy Sixpence from Acme Realty says
Help-U-Sell?  Oh, they’re not Full Service . . . I know they’ll say they are, but they really don’t do anything for their sellers except put the sign in the yard.  Sometimes they won’t even put you in the MLS – and of course, without that, you’re not even on the market!  We all know you get what you pay for, and that’s really true when it comes to Help-U-Sell and the other discounters,
When she says that, she sometimes gets a head nodding Amen from her audience. But they are not nodding because what she’s saying about Help-U-Sell is true. They are nodding because they know there is a difference between Nordstrom and Wallmart . . . and she successfully uses that knowledge to twist perception in the real estate arena.  She reinforces the irrational belief that Full Service means Full Commission . . . and sometimes it works.
Listen:  we do everything they do, and in fact:  we do more; but we charge LESS because we do business in a more efficient, modern way.  Don’t be derailed by the hype – contact us directly to find out what we do, what we charge and how much you could save.

Wednesday, July 24, 2013

Charles Schwab and Steve Jobs created the "Time of Change". Real Estate, get ready - here it comes!

We often look at the history of the securities business in the last 15 years and draw parallels to real estate.  Remember?  We used to have to contact a broker to trade a stock and we paid a percentage based commission for the privilege.  Stock trading was mysterious, complicated, beyond the grasp of most people and the commissions were, well, just the cost of entry.
Then along came Charles Schwab with $15 flat fee trades.  Consumers loved it and the industry took note.  The forward thinkers not only shifted to the new model, they enhanced it by putting powerful analytic information into consumers’ hands on the Internet.
Sound like the real estate business?  You bet.
The same kind of change happened in the Music business.  Remember when we used to go to the music store to buy vinyl LP records, and then CDs?  That’s how music was distributed.  The whole industry was built around the idea of making and marketing these plastic objects called ‘records.’
But then, technology made it possible for people to take the records, digitize them and then share them (often illegally) over the Internet.  The industry reacted not by looking forward at how they might capitalize on this,  but by looking to the courts, suing the most prolific pirates.  Meanwhile, Steve Jobs – a music industry outsider – quietly invented the Ipod – nothing more than a solid state drive with a simple user interface – and the ITunes store for making digital music accessible to consumers.  For 99 cents you could buy a song . . . and, today, that’s what we do.
Just as in real estate, we had a music industry fighting to preserve the status quo . . . and losing; because you can never preserve the status quo.  It is impossible. In both cases we have industries struggling to keep information out of the consumer’s hands . . . and losing, because you can’t stop the consumer.
Want another example?  How about the Travel industry.  Not too many years  ago we used to call a travel agent to book a plane trip or a vacation.  They had all the information:  schedules and fares and so on; and they earned a nice commission for helping us navigate this mysterious process.
How many travel agents do you know today?  Really:  they have become largely extinct!  And how do we book travel today?  We go to the Internet where all the information is housed and make our decisions for ourselves.  Unfortunately, the pricing model for travel has not changed significantly . . . which makes me wonder:  who is getting that commission today?
And here we have real estate:  an industry that justified its percentage based commissions for decades largely by hoarding information.  Then along came the founder of Help-U-Sell, Don Taylor (and by the way, he came along a good ten years before Charles Schwab had his epiphany).  He saw a way to do the real estate business not for a nonsensical percentage based commission, but for a Low Set Fee.  He saw all of this hoarding going on and decided that Information Without Obligation would be one of his new company’s core values.  The maturation of the Internet twenty years later put that value on steroids . . .
And how did the Industry react?  It ran in terror for the hills, dug foxholes, locked up the valuables (the information), put its fingers in its ears and refused to hear what consumers were saying.
Even today, with a real estate market undergoing upheaval, with change swooping down around us like a Tsunami, how many of the big national brands are talking about their pricing model?  Um . . . none.
Even today, when consumers can (with the click of a mouse) get all the information REALTORS used to hoard, how many are talking about how we can use that fact to streamline the process and make the experience better for the home buyers and sellers?  Um . . . none.
At Help-U-Sell Bay Beach Realty, we embrace the new way to buy and sell real estate.  We want our buyers and sellers to be as involved in the process as they want to be and give them all the tools and information they could possibly need to have a stellar experience.  Our approach to the business is not mysterious and it makes sense . . . just as our Set Fee does.  Think of us as the Charles Schwab/ITunes/Orbitz of real estate, and then call us when it’s time to buy or sell.  609-242-0506

Thursday, July 18, 2013

WHERE DID ALL THESE PEOPLE COME FROM?

Very few people realize how many agents are involved in the sale of their home.  Here's a quick accounting -- probably the only one you'll see.

In most transactions there are 3 or 4.  The listing agent and maybe a selling agent in the same office and their broker.  OR  The listing agent and broker plus the selling agent and broker.  All agents MUST work under a broker.

Now, a new twist in the real estate industry is the concept of teams.  The broker pays the team leader more money and the team leader recruits agents under them.  Sort of like a manager.  Teams are a waste of money but they're getting popular so now we could be up to 6 fingers in the pot.

But wait, how about referral agents?  See, in addition to the 1 million +- members of the National Association of Realtors, there are untold numbers of referral agents.  They do so little work that they don't want to or can't afford to pay the annual dues so many brokers set up a separate company which is NOT a member of the Boards of Realtors and ware house these agents to refer business.  Getting crowded isn't it?

And believe it or not, at least 2 national firms pay recruiting bonuses to agent who bring in other agents anywhere in the country.  So part of your hard earned equity could be going to someone far away who will not be involved the your transaction and never see your house!  Ouch!

It's unlikely all of these people would be involved in any sale but the average is about 5.  At Help-U-Sell it can be a little as 1-3 - and we pass the savings on to our Sellers.  (Hey Sellers, we love you!)

So if you plan on selling a home in Toms River, Beachwood, Bayville, Forked River or Lanoka Harbor in Lacey, give us a call.  We ever service Waretown, Barnegat, Manahawkin and Little Egg Harbor.  Our Common Sense approach is guaranteed to save you lots of money for the same services.

609-242-0506.