Insanity vs. the “Code of Ethics”

Here's an ACTUAL e-mail I received earlier today from the owner of a home that is listed with another broker and about to "expire". (I've changed the name of the brokerage for obvious reasons):

"We are the owners of the above home for sale.  Our current listing agreement with 1a2b3c Realty will soon be expiring and we are shopping around for a reduced real estate commission.  What's the lowest percentage commission you would be willing to list it for?"

An analysis of similar homes to theirs clearly showed they were at least $100,000.00 over-priced!

On how many different levels is this situation ABSURD?

Please don't get me wrong. I'm not just frustrated with the mindset of the homeowners. What possessed the real estate agent to take that listing at that price in the first place? What was the Broker/Manager thinking when they permitted this disservice to their client?

Now, 6 months later, these misguided folks are shopping for another brokerage based on "lowest commission percentage" via the internet! The saddest part of this tragic story is; it's not over yet. They will succeed in finding exactly what they are looking for; a brokerage to take their listing, at their price, for the lowest commission. Another 6 months will pass, without anyone looking at their home, and the cycle will continue…unless…

Unless we as an industry remember and practice the REALTOR "Code of Ethics" by being honest and professional! Let's STOP the insanity one e-mail at a time. Here's a copy of my response:

Thank you for remembering and considering Coldwell Banker Flanagan Realty.  Unfortunately, to enter into a "service agreement" based solely on the amount of the real estate commission would be another disservice to you; the first was an agent and brokerage listing your home at "that" price in the first place.

Please understand, I'm not trying to insult you or your home, but an analysis of your model, in your Village, clearly shows your home was "overpriced" for the current real estate market by at least $100,000.00.

I'm confident your home is far superior to other models in your village but just as the stock market determines the current value of any particular stock, the real estate market determines the current value of any particular home.  So, attempting to market and sell your home above the "market range" would be like trying to sell penny stocks for a dollar.

Re-listing your home based on a reduced commission will only lead to more frustration and disappointment for everyone involved.  May I ask, "Why are you attempting to sell your home?"  "Where would you like to move to?"  And, "How soon would you like to get there?"

Please feel free to post your comments.

 

 

 

The Ocean County Board of Realtors' 2008 REALTOR of the Year!

How often do we, as practitioners, criticize the decisions of our local boards? Well, I'm proud to report that our local board, the Ocean County Board of Realtors, located in Toms River, NJ, has made a decision that is indisputable. Their decision to bestow the honor of "2008 Realtor of the Year" to Robin Bahr is perhaps, in my opinion, one of the best decisions made in 2008!

Not only is Robin the "consummate professional", (GRI, CRS, SRES), but she also personifies the REALTOR "Code of Ethics"! Everyone and anyone, who has had the privilege of working with Robin, will acknowledge her dedication, passion and compassion. Aside from her many contributions throughout the years to the Ocean County Board of Realtors, Mrs. Bahr was instrumental in the re-formation and development of the Women's Council of Realtors, Ocean County Chapter, serving as it's President in 2008!

When Robin is not serving her clients and customers, or volunteering her time with the WCR and OCBR, she may be found at one of many of her charitable pursuits; including but not limited to the "Relay for Life" for the American Cancer Society of Toms River, NJ. Robin believes in the ultimate goal of equality for all women in the areas business, opportunity, growth, health and well-being by serving on the Business and Professional Women's Association of Ocean County.

I'm quite sure I'm leaving out many more of Robin's contributions to our industry and our community, but suffice it to say, in my decade of real estate experience, I have yet to meet her equal!

What is the definition of “insanity”?

What's the definition of "insanity"? Answer; doing the same thing over and over again, expecting different results.

Today, The Washington Post reported, Homeowners redefaulting after getting aid. According to John Poirier's and Patrick Rucker's article, "more than half of mortgages modified in a bid to avoid foreclosure fell delinquent within six months"! They go on to report that Comptroller of the Currency, John Dugan, suggests the following reasons why (or a combination of all of them):

• Was it because modifications did not reduce monthly payments enough?
  
• Was it because consumers replaced lower mortgage payments with increased credit card debt?
  
• Was it because the mortgages were so badly underwritten that borrowers simply could not afford them, even at reduced payments?
  

The one question Mr. Dugan forgot was; was it because these borrowers never should have been approved for a mortgage in the first place? What makes us, anyone, think that by reducing the SAME borrowers' payment, the BORROWERS' behavior will change???

Unfortunately, sometimes we must be "cruel to be kind". Nature has its own primitive way of ensuring the survival of the species; the weak, sick and old are picked off by the predators. It's the "Natural Order" of things. Let's take a lesson from Nature and save our, the tax payers money, by allowing this round of foreclosures to run its course. Save the "bail out" for the borrowers' who deserve it; Mr. & Mrs. Homeowner, who can no longer afford their mortgage because he or she lost their job, NOT because he or she NEVER should have received a mortgage in the first place!

 

Outbreak of RDS (Rampant Denial Syndrome) Hits Toms River, NJ!

Some FASCINATING statistics for November in Toms River, NJ:

Statistics Summaries Report

Category - SingleFamily / Area: TOM - TOMS RIVER TWP / County: OceanStatistics for Entire MLS from 11/01/2008 to 11/30/2008

	Total	Total List / Closed $	Avg List $	Avg Closed $	Avg DOM	Median Price $	%SP/LP
New	109	$53,993,900 / n/a	$495,357	n/a	17	$375,000	n/a
Under Contract	38	$14,936,496 / n/a	$393,066	n/a	63	$272,450	n/a
Closed	46	$19,293,212 / $18,131,450	$419,418	$394,162	111	$296,500	93.98%
Expired	77	$36,429,631 / n/a	$473,112	n/a	188	$365,000	n/a
Currently Active (as of today)	729	$360,865,054 / n/a	$495,014	n/a	118	$399,000	n/a

--Information deemed reliable but not guaranteed--Copyright: 2008 by the Monmouth County Association of REALTORSR
We Never Stop Moving!
Prepared by JAMES FLANAGAN of COLDWELL BANKER FLANAGAN REALT on 12/2/2008 8:50:07 AM

Why would I call them "fascinating"? Let's take a closer look, shall we?

• 46 Homes CLOSED during November at an average price of $394,162
  
• And ONLY 38 homes went UNDER CONTRACT at an average price of $393,066
  
• SO, why did 109 NEW homes LIST for an average of $495,357 when…
  
• 77 homes EXPIRED at an average LIST price of $473,112????????????
  

Here's my Official Diagnosis:

Toms River, NJ, continues to suffer from RDS (Rampant Denial Syndrome). When 109 Sellers think they will sell for more money than 77 unsuccessful sellers FAILED to sell for; that's RAMPANT DENIAL SYNDROME! When real estate agents continue to LIST homes for an average of $100,000 OVER the current CLOSED price; that's RAMPANT DENIAL SYNDROME! When, despite the OVERWHELMING EVIDENCE ABOVE, sellers and agents REFUSE to accept REALITY; that is RAMPANT DENIAL SYNDROME!

CAUTION: Failure to seek immediate treatment for RDS could result in catastrophic consequences such as "short sales", "foreclosures", "bankruptcies", "insanity" and in certain cases DEATH (of a real estate agent's career)!!!

Isn't Technology Wonderful?

It's 4pm(EST) and I have received no less than 3 e-mails, on my "Blackberry", alerting me to the Fed's decision to purchase "X" amount of mortgage backed securities and the subsequent effect this announcement has had on interest rates. Isn't technology wonderful? In order to verify this information, I went to Inman News and sure enough; here's their release...Isn't technology wonderful! Then, I log on to activerain and see that Rob Rauf (see Rob's post here) has already posted this news...Isn't technology wonderful?

So, if technology is so wonderful, why aren't more real estate agents in Toms River, NJ, using it to get this exciting news out to all their buyers and buyer prospects? Well, let me give you my hypothesis:

They would rather be basting a turkey secure in their own rationalization that NO business is ever conducted over a Holiday Weekend, let alone this year. And yes, I know Thanksgiving is still two days away!

Now, please let me clarify; I have nothing against Holidays, especially Thanksgiving. I too am looking forward to loosening my belt a notch and fading in and out of a "stuffed" slumber during football...BUT NOT UNTIL THURSDAY!

Alas, have no fear; for if we are the statistics? And we are! I find comfort in the knowledge that 13% of us (real estate agents doing business in Toms River, NJ) will be busy taking advantage of; the Fed's decision, lower interest rates and technology. The same 13% will enjoy their turkey just a little more than their peers this Thursday, secure in the knowledge that while everyone else was in "Holiday Mode", they were e-mailing, texting and CALLING their buyers and buyer prospects with the GOOD NEWS!

Riddle Me This, Batman...

Within the last 2 weeks, I have been questioned by a couple of our better Listing Agents as to why our company does not list RENTALS. Apparently, there are a significant number of unsuccessful sellers in the Toms River, NJ, market that would like the "option" to rent their home if they cannot sell it at their price.

So, let's look at this conundrum from the three significant perspectives; first, the Agent's Perspective:

• It's a tough market out here. We have 14 months of inventory here in Toms River and none of my listings are selling, so why can't I make a few bucks renting it for them?

Yes, it is a tough market and discretionary sellers who are still in denial over the market value of their home are only making it tougher! The potential return on investment for "spot rentals" is NOT worth the time, aggravation and liability involved. Are we NOT fooling ourselves into thinking we're busy, and thinking we're making money, instead of staying FOCUSED on our goals and the true value of our TIME?

Next, let's look at the "Bewildered One", the perspective of today's Accidental Landlord:

• "I'm not giving my house away! Maybe I'll just rent it until the market changes and then sell it? I don't have to sell!

If you don't have to sell, do EVERYONE and this country a service and take your home off the market! These "sellers" are half the reason we have 14 months of inventory in Toms River, NJ. Just be aware; because of all the "tightened standards" in the mortgage industry, your pool of tenants consists of those who DON'T have good enough credit to get a mortgage OR; those who just lost their home to FORECLOSURE or took a SHORT SALE! Have you read NJ's TRUTH IN RENTING handbook?

And last but certainly not least; my humble opinion as the Broker/Owner:

• It is a tough market out there and my agents are frustrated and discouraged. It is my RESPONSIBILITY to support, encourage and help them make money! Should I be looking at alternate sources of revenue?

Absolutely. But RENTALS are NOT a viable, sustainable source of revenue in our market! There are buyers who understand what a GREAT TIME it is to buy and sellers who have to sell. We must stay FOCUSED on helping today's First Time Buyer achieve the American Dream and we must be SELECTIVE and assist only those Sellers who need to sell! To compromise on this commitment would be IRRESPONSIBLE.

What's YOUR Top 3?

I received an interesting e-mail last week. It was part of a recruiting campaign by a local "100%-Residual Income" driven brand. Before I launch into my criticism of this e-mail, let me point out something positive about it; only my e- mail address showed in the "to" field!

The "guts" of the e-mail was a WORD attachment entitled, Top 20 Important Questions for Agents to Ask During a Real Esate Interview. No, that's not my typo. That is exactly how "Estate" was spelled on the attachment! Aside from the redundancy of Top 20 and Important, the title was effective enough for me to read on...their next mistake.

Here are the Top 3 of the Top 20:

1. How many training classes do you offer per month?
2. Who will train me?
3. How much will the training cost?

I won't speak for any other real estate professional but those 3 questions wouldn't make my list at all, let alone the Top 3! Now, don't get me wrong; I'm a huge proponent of training and education but...obviously, this Broker does not understand and does not respect their target customer; today's "experienced sales associate". Today's ESA has most likely been trained because they are STILL HERE! I propose today's ESA would more likely ask these 3 questions:

1. How will you help me make more money?
2. What are you doing in this market to generate leads?
3. Will leads from my activities be directed back to me?

I may be wrong but I don't think so...The main problem, as I see it, with this particular company's philosophy is that they haven't accepted WHO their REAL CUSTOMER is; today's real estate consumer (buyers & sellers)! And, as long as they stay focused on recruiting "experienced sales associates" that are concerned about how much training will cost, they will lose much more than just the "t" in "estate"!