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Saturday, 24 August 2019
Agent Resource Center
This Old House - Do-it-Yourself

I was raised to be an officer in the United States Navy. I graduated from Annapolis, and I ended up with a career in sales, by default.

I have done a lot of selling over the past 44 years, cumulatively at least a few hundred million dollars in personal selling. My largest sale was the sale of a technology company for 22 Million Dollars.

The largest single real estate sale was a 1.5 million dollar apartment building in the 1980s. Most of my sales were just your median priced homes, or typical duplex up to 30 unit apartment building, a strip center here and there...and it took me a few years to really get going.

I sold condos, houses, apartment buildings, shopping centers, industrial properties, medical buildings, limited partnership interests in real estate investments…and then stocks (including REITS), bonds, mutual funds, tax services, financial planning services…and website services, e-mail services…and education programs, online and offline…and the benefits of the Internet itself to the entire real estate industry. I never thought I would have a career in selling, but it turned out that way. When I started in real estate, it was not the selling that I fell in love with, it was real estate that was my passion. It was only later that I grew to enjoy the excitement of writing the contract, and the "close."

What is the point? A career in sales by default, which is more than likely the same situation for many in real estate sales today. So, here you are, where you may never have anticipated you would be, selling to earn a living. How do you make the most of it?

The more you sell, the better you get at selling. I was always passionate about homeownereship. I learned at an early age from my parents that buying a house was the way to go. I never felt that I needed to "sell" real estate to anyone...they came to me because THEY wanted to own real estate. I saw my job as that of a helper, with a fiduciary duty.

Effective selling is a skill to be developed for those serious about a sales career. Learn the art and science of sales. There have been many good books written on the subject. Develop a reading list, a schedule, and then read.

Understand persuasion and how it fits into your business.

Think of yourself as a "helper" (no one wants to be "sold" something). After all, if you are in real estate sales, you are helping people with what is usually their most valuable asset, their home, and something they want to buy (or sell), or they would not be talking to you about it.

Success will not come overnight, more than likely. There is a Learning Curve (the relationship between effort and results).

Here is a short list of what I believe is necessary for one to have an effective career in real estate sales (and most of it applies to sales in general):

• Product Knowledge
• Communication Skills - verbal skills and writing skills
• Access to Potential Clients
• Marketing Skills
• Technology Skills
• Financial Skills…for business and your personal life
• Generational Knowledge
• International Knowledge
• Integrity
• Perseverance
• Commitment

And let's not forget....

Enough money (capital) to get you through start up and sustain you through the lean times.

Posted On Thursday, 22 August 2019 05:00 Written by

Agency disclosure Laws were first passed in California...as a compromise.

Getting agency disclosure legislation enacted in California was

about a 12-year process. There was some serious talk of outlawing dual agency in the 1970s and three legislative proposals began their way through the legislative process. One of the three proposals would have made dual agency a criminal offense. The California Association Realtors worked closely with consumer lobbying groups and legislators. Over the next eight years the CAR and legislators developed a compromise bill.

The compromise did not outlaw dual agency, which was a very common, and some would say disclosed practice (and others would say undisclosed). The compromise made California real estate licensees disclose agency relationships in residential acquisitions. The reasoning was, that if buyers and sellers truly

understood the options available to them, they would choose the representation that was in their own best interests.

In 1986 the California legislature passed the agency disclosure law unanimously. The legislature granted the real estate industry a grace period until the beginning of 1988 to prepare to implement the disclosure law. The California legislature mandated that persons selling residential real estate must give

agency disclosure information to the parties involved in real estate transactions. This information must include the possible agency relationships that the real estate firms involved in the transaction may have with their clients.

When the agency law took effect the real estate business was in a definite upswing and a sellers' market. Licensees busy scrambling to market properties did not have time to worry about agency -- they were too busy making money! Unfortunately, even today few people in the real estate industry understand agency disclosure.

Prior to 1989 (or 1990...these details elude me), an MLS operating under NAR's Model MLS Rules was (among other things...but this was primary) a "unilateral offer of sub agency." Everyone worked for, was the agent of, the seller by virtue of the MLS. It was unilateral and automatic.

The only way a "cooperating broker" MLS subscriber (the MLS member...the participating broker) could get out of being a sub agent was to "refute the unilateral offer of sub agency."

Attorneys I have discussed this with over the years (including extensive conversations with Alex Creel of the California Association of REALTORS Legal Staff during 1986-88 when the California Agency Disclosure Requirement was being enacted...and with my partner, Mr. Agency himself, John Reilly many times over the last few years and, coincidentally, at lunch today), had no consensus as to how "refuting the unilateral offer of sub agency" could be accomplished. Besides, why would one want to be anything but a sub agent...that was the way it was always done.

Then, in 1988, the California Agency Disclosure Requirement placed California REALTORS in danger of making disclosures that they were "representing the buyer exclusively" while at the same time they were already agents of the seller because of the NAR MLS Model Rules, with not even the slightest clue that "refuting the unilateral offer of sub agency" was even required...and even if they knew it was required, no one could tell them how to do it.

It was obvious to those of us who were students of this issue that something had to be done with the NAR Model Rules. As I recall, NAR was reluctant at first to change the MLS Model Rules. CAR then created and adopted what was referred to as the CAR Model Rules, which changed an MLS from a "unilateral offer of sub agency" to a "unilateral offer of compensation, sub agency optional." Sandicor, the San Diego Regional MLS, was one of the first MLSs in California, if not the first, to adopt the CAR Model Rules.

In 1992 I traveled with associates representing the California Association of Buyer's Agents to Boston to see if Ralph Nadar would take up our cause...he wouldn't. His position was that there was no consumer demand for changes to the agency laws in real estate, and he did not want to spend any of his social and politica capitaql on something consumers did not care about. Some of us in the Industry cared about it, but consumers did not.

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Posted On Tuesday, 20 August 2019 05:00 Written by

...and some things you never knew about MLS...even if you believe you are an MLS expert :-)

This video is an indepth conversation about Agency Relationships and MLS between John Reilly​ and I.

Can buyers be represented in real estate transactions?

At one time, not that long ago, the answer was no...not without great difficulty, and even attorneys were not sure how to do it!

Why was MLS set up as a Unilateral Offer of Subagency in the first place?

Keep in mind that a prime mover in the creation of MLS early in the last century was the desire by the founders to raise the level of professionalism in a business with a very bad public reputation, and no licensing laws to protect the population from the unscrupulous.

The one thing that other "professions" had that real estate practitioners did not have, were fiduciary duties. Ageny relationships brought with them fiduciary duties, and hopefully, the upgrading of the reputation of real estate practitioners.=, so it was included in the early MLS concepts.

MLS is one of the greatest inventions of all time, facilitating the building of wealth for hundreds of millions of Americans over the years, with only the seller due agency duties from licensees.

 

Posted On Saturday, 17 August 2019 05:00 Written by

Let's talk about commissions...don't worry, you won't go to jail if you watrch this video, or even if you particiapte in this conversation!
REALTORS are warned constantly, and have been for years, often by those who know nothing about this subject, not to speak about commissions.

But the warnings are overkill. Have we put ourselves in a position as an industry that it could be viewed now as collusion because we admonish each other not to speak about commissions?

Here is a take on commissions that you may not have heard, from two people who are industry experts and authors on the topic...Please take a few minutes and watch the video.

 

Posted On Thursday, 15 August 2019 05:00 Written by

Most Internet "Leads" are worthless. Many have long incubation periods. Keep this in mind when you consider purchasing leads from an unknown, or even a known source.

What leads me to believe that most Internet leads are worthless? Common sense and experience.

There are only 6 million transactions per year. I say again, there are only 6 million residential real estate transactions per year, and this is fairly consistent year after year. I have been telling this story since 2010. This will change in the future as the friction continues to be removed from the real estate transaction, but it is a fact of life today.

Most leads offered by lead generators and promoters are not "leads" at all, and many are sold to multiple people.

The portals such as Zillow and REALTOR dot com report together over 100 million unique visitors per month on their sites.

That is multiple hundreds of millions of "leads" per year with only 6 million transactions per year.

Rich Barton, Zillow Group CEO said in a recent interview:

"Let's not kid ourselves. You guys absolutely know that. Those people who are just being entertained are wasting your agent's time."

Posted On Monday, 12 August 2019 05:00 Written by

InternetCrusade™ envisions a global cultural shift to online communication, commerce and information exchange over the next few years.

To facilitate and enable this shift, InternetCrusade’s mission is to:

1. Drive as many people as possible online through the year 2000.
2. Provide a support mechanism to enable people to comfortably and efficiently utilize the power of the Internet – by shortening the learning curve and reducing the frustrations of technology…We make sense of the Internet
3. Encourage and promote community activities online.
4. Give people a stake in their Internet future by assisting them in the acquisition of their own domains and the creation of their Internet Marketing Presence.
5. Enable human beings to optimize the power of the personal computer and the Internet in their life.
6. Find Partners whose interests are enhanced by the work of the InternetCrusade™ and create and develop an ongoing relationship with them.

Posted On Friday, 09 August 2019 05:00 Written by

A point not to be lost in the information clutter of today is that MLS was invented by the National Association of REALTORS, in part, to increase professionalism and the reputation of the real estate practitioner.

The tools to accomplish this through an organization of competitors was the creation of:

• A listing service
• Exclusive listings
• Agency duties

The National Association of REALTORS® was founded as the National Association of Real Estate Exchanges on May 12, 1908 in Chicago. With 120 founding members, 19 Boards, and one state association, the National Association of Real Estate Exchanges' objective was "to unite the real estate men of America for the purpose of effectively exerting a combined influence upon matters affecting real estate interests."

Prior to the creation of the National Association of REALTORS, there was no real estate license law. The "real estate industry" consisted of:

The bad reputations of real estate practitioners

• Unprofessional Conduct
• No Agency Duties
• No Exclusive Listing Agreements

"Prior to the organization of the National Association of REALTORS, the vast majority of real estate practitioners were not agents. The real estate man was a speculator, a middle man, a curbstoner, or an optioneer. He involved himself in the transaction without a client. He would use options to tie up property he thought he could sell; he would obtain net listing agreements which essentially involved him as a middle man seeking the lowest price from the seller and the highest price from the buyer so as to widen the spread which was his compensation."

(William D. North, former Executive Vice-President and General Counsel of the National Association of REALTORS, 1993)

Pillars of MLS are the Exclusive Listing, and with it, the Law of Agency, and Fiduciary Duties. This is often lost in the data conversation relevant to MLS today.

In 1993 (the year I was president of the San Diego Assocciation of REALTORS), there was an NAR Presidential Advisory Group on the elimination of Agency and replacing it with transaction brokerage.

"That agency relationships was at the very heart of the concept of Professionalism in real estate is indisputable from a historical standpoint.

The careful and documented description of the origins of the National Association of REALTORS in Janet Davies work entitled Real Estate in American History permits no doubt that the Founding Fathers of NAR viewed the agency relationship as the most important element distinguishing the "professional" from the pedestrian real estate practitioner." (Bill North)

Posted On Wednesday, 07 August 2019 05:00 Written by

MLS is again under attack (What else is new?)

I wrote about the evolution and the future of MLS in 2008 in a paper entitled "MLS Today and MLS Tomorrow...
The reports of my death are greatly exaggerated."

To understand where MLS is today and where it may be headed, requires an understanding of the key elements that brought MLS to this juncture.

I propose they are as follows, and will discuss them in a series of posts over the next few months.

Key Elements of the Construct (and possible deconstruction) of the current system of MLS:
Creation of NAR, its Code of Ethics, and the intention of its founders
Open Listings and poor broker reputations
Fiduciary Duties and Agency
Dual Agency
Agency Disclosure
MLS Model Rules
Antitrust - History
Antitrust - current legal actions
Current Structure of MLS nationwide
MLS practices - commission transparency
Moves to Standardize Data
Moves to Consolidate MLSs
Moves to create a "National MLS"
Off MLS and Coming soon
Consumer Expectations
New Brokerage Models

Posted On Sunday, 04 August 2019 05:00 Written by

How do your clients choose a title insurance company (or do you choose it for them)?

How do you choose a title representative (and title company) to recommend to your clients?

"Shopping for title insurance is reasonably good advice, but few consumers ever come to closing prepared to shop title insurance options. Reasons for this are that the selection of the closing or escrow firm varies state by state between buyer and seller, the price of title insurance seems relatively small in comparison to the myriad of other costs during closing and salespersons tend to see closing services as an extension of their network of professionals and are unlikely to encourage shopping." (Ben Clark)

Posted On Friday, 02 August 2019 05:00 Written by

From Geoffrey Moore's marketing classic, "Crossing the Chasm."

Which are you?
(Innovator, Early Adopter, Early Majority, Late Majority, Laggard)

The "Chasm" begins after the last Early Adopter adopts the new technology.

Tech companies that fail, often fail, according to Moore, because they get to market too soon. The Innovators will try just about any new technology, as will the Early Adopters if the Innovators are using it.

The trick is arriving at the Chasm about the time the Early Majority is ready for the product. If a company goes too long (Chasm) without a sale, which is often the case, it will probably fail...or pivot...or pivot and fail.

Posted On Wednesday, 31 July 2019 05:00 Written by
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