In our office, there are two full-time real estate agents. Before we started CityBurb.com, we both worked in a large office with a few hundred agents. In that office, we were taught to tell our listing prospects about the size of the office and the number of agents that were employed there. Although we did not explicitly say it, this fact was meant to give the seller the idea that our company would have more people working on selling their home than the next, smaller company. This is yet another real estate myth.

If you hire a large company to sell your home, you are not hiring every agent in that company; you are hiring the lone agent sitting at your kitchen table. The majority of real estate agents are independent contractors, meaning that most work for themselves under the structure of a brokerage. Although the contract you sign is with the broker, the only person working on your listing is the agent representing that brokerage. Even then, you are only hiring that agent to market your home, not to sell it – 99% of the time an outside agent will bring a buyer. However, I’ll save that myth for another post.

Until then, hire an agent that gives you honest and effective marketing efforts. Hire us.

We don’t do open houses. We used to because many sellers had requested them and so we complied. If that was the service sellers wanted, we were willing to offer it. However, at the beginning of 2006 we looked back at our business for 2005 as we do every year to analyze where our best marketing efforts were spent. We didn’t sell any houses because of an open house. Since part of our business model is to increase the efficiency of our marketing efforts in order to save our clients money, we dropped open houses.

Now, most agents reading this will, of course, know that nobody sells a house through holding an open house. Agents hold open houses in order to attract future buyer clients that are wandering through neighborhoods without an agent. In fact, this is one of the methods that most big brokerages teach new agents in order to find new buyer clients.

Again, here is another example where the industry is not serving clients and their needs. What we decided in the beginning of 2006 was that instead of agreeing to hold the open house (and subsequently forcing the sellers out of their house for the weekend), we would better explain to sellers why they don’t help sell the house and why so many other agents offer to do them. We want to provide efficient service to sell homes, not just “filler” that seller’s perceive as helpful, but actual service that will sell the home.

I got started on this subject because a friend of mine sent me this MSN Real Estate article regarding the truth about open houses.

The bill that requires real estate agents to present offers directly to sellers, also known as the bill requiring “minimum service” from agents, has passed the Idaho Senate according to the Idaho Business Review. I talked about this last week when the bill first reached the Senate.

Again, this doesn’t affect our company directly (we are, essentially, a full-service company once a purchase agreement is written), but I think it might start the industry on a slippery slope that will result in a lot less choices for the consumer.

So, any guesses on what they will require next? Since I believe this bill was a silly idea to start with, feel free to add some humor to the answers of that question.

Where did we, as real estate agents, go wrong? Since we started this company at the beginning of the year we have spent a lot of time talking to for sale by owners and expired listings. For sale by owners I will leave alone for another post; today I want to discuss expired listings.

For those that do not know (real estate agents are known for their public-confusing lingo), an expired listing is a home that was recently listed with a real estate agent, but now the contract has run out and the home hasn’t sold. Our MLS tells us which homes have expired so that all the other agents in the area can call or stop by to try and get that listing. Think of it as ambulance chasing for real estate agents.

Anyhow, there are two things I hear when I talk to these home sellers that absolutely floors me. First, about 10% (my rough calculation) of the sellers I talk to have no idea that their home has expired on the MLS and is no longer listed for sale. Where are their agents and how did they get the listing in the first place? Our MLS system alerts agents when their listings are getting close to expiration. It really couldn’t be any easier. It is right on the home page of our MLS. The second thing that concerns me is that these sellers will immediately tear into me about how I had four months to sell their home and I didn’t, so why do I think I could do it now. Whoa. Back up. I tell them that I wasn’t hired as the listing agent and as a buyer’s agent I didn’t have a buyer in that price range, area, or whatever the case may be.

It seems as though agents aren’t properly explaining how the industry works when they list a home. When we talk to sellers we tell them that statistics show that an outside agent will bring the buyer of their home and we market the home accordingly. We also explain to them that no matter what the condition of the market or what advertising an agent does, the key to selling their home is PRICE. You give us a home in any market and if it is priced right, we will sell it.

So, how do we educate our sellers so that their frustrations are aimed at the market and not the industry?

I often tell people that I got into real estate because I grew up in the industry. My parents are both brokers. My uncle is a broker. My aunt is a broker. My brother is a broker. And a handful of my cousins are brokers. However, I am staying in the industry because I don’t like it (the industry, not my job). I read an article today about how the Idaho Association of Realtors is trying to get a bill passed that would require real estate agents to provide a minimum amount of service in order to list property for sale on the MLS. What upsets me about this bill is that the IAR and the real estate industry in general spend an enormous amount of time and money (that I have paid them) protecting their precious 6%. Instead of looking at the discount brokerages (which, technically, CityBurb is because we don’t charge 6%, even though they can’t really state that 6% is the norm or it would be called price fixing) and trying to compete with them, they are trying to outlaw them.

Now, really I don’t think the idea that agents must present all written offers to their clients is that big of an issue – only a handful of brokerages ask agents to send offers directly to the sellers and adding that one step of forwarding a fax or email won’t break their businesses. (A quick note here: CityBurb presents all offers directly to our sellers, so this bill won’t affect us.) The big issue to me is that the industry fails to focus on the consumer and fulfilling the consumers’ needs. This is a service industry, right? Companies like Zillow and Redfin are being torn down by traditional 6% agents because their use of new technology cuts into the agent’s paycheck. Nobody needs a real estate agent. I’ll say that again. Nobody needs a real estate agent. It is a service industry and sometimes services need to be adapted to the customer and sometimes the customer doesn’t need the service at all. Why not focus on providing the service that customers want to the customers that want it?