Boise Homes: How Referral Fees Work

Have you ever worked with a real estate agent who was eager to refer you to another agent in another real estate market?

Well, there’s a reason for that eagerness.

That reason is a “referral fee”.

One of the inside secrets of real estate is the practice of referring clients to other agents in return for receiving a portion of the receiving agent’s commission when a sale occurs.

In real estate speak, that’s called a referral fee.

Referral fees aren’t illegal, but I believe they should be fully-disclosed to all parties to avoid the appearance of a conflict of interest.

When I have a client who’s relocating, I ask them if they’d like my help finding an agent in their new location.

If they want my help, I discuss the details of their move with them in detail so I understand their needs, wants, likes, and dislikes.

Then, I research the market where they will be relocating to identify competent agents who might be a good fit for my client.

Then, I “test” one or more of those agents by calling and e-mailing.

I actually hope they don’t answer their phone so I can leave a brief message to see how long it takes them to respond.

If they don’t respond promptly, I eliminate them from consideration.

Those agents who answer their phone on the first or second ring go to the top of the list!

I also evaluate their internet presence as an indicator of competence.

Agents with no internet presence, only a business card webpage, or a sub-page buried deep in their broker’s website, are automatically eliminated.

If they don’t understand the role of the internet in today’s real estate market, they’re probably lacking in other areas of real estate too.

Finally, I interview them on the phone to determine how active they are, how long they’ve been in real estate, if they’re full-time, if they know the area where my client will be relocating, and assess their business practices to determine if they’re a good fit for my relocating client.

If they pass those tests, I refer my client in return for a portion of their commission.

I also follow up on the transaction afterward.

In other words, I “earn” my referral fee vs. just passing along my client’s name, hoping to receive a referral fee.

Typical referral fees range between 20% to 25% of the receiving agent’s commission and cost the client nothing.

Corporate relocation companies also require referral fees from receiving agents and their fees are almost always considerably higher.

Agents willing to accept relocation company referrals are often required to pay a referral fee of 30% or more (I was offered one for 37% earlier this year and renegotiated it).

Referral fee agreements should be documented in writing before the transaction occurs.

In Idaho, it’s illegal to pay a real estate commission to anyone who’s not a real estate licensee.

 

Boise New Homes For Sale

At a glance, many buyers consider new homes as simply a part of the overall pool of available homes for sale.

But, in reality, new homes are very different from resale homes.

When you consider buying a resale home, it’s “there” and you can see exactly what the seller is offering for sale.

New homes are different because there are relatively few completed new homes for sale at any given time.

That’s because few builders can afford (or obtain financing) to build a large number of unsold homes.

That means buyers must base their buying decision upon viewing a model home or reviewing building plans.

Buyers who are “visual” often struggle to understand a set of blueprints as they try to make one of the biggest financial decisions of their life.

Buyers who choose to build a new home must also make numerous decisions, including lot selection, plan development/changes, and dozens of selections for everything that will go into their new home.

Building a new home requires a tremendous amount of communication between builder and buyer that doesn’t exist in a resale home transaction.

Another consideration is the time that’s required to build a new home.

Production homes (non-custom homes) can often be completed in about 75-90 days following issuance of the building permit.

Custom homes usually take 120 days or more after permit issuance, depending upon a variety of factors, including developing plans, getting construction bids, and other considerations.

Buying or building a new home can be exciting, but it’s a very different proposition than buying an existing home that can be seen, touched, and be yours after a short escrow period.

If you’re interested in buying or building a new home, give me a call at (208)938-5533 or e-mail me.

I’ve helped many of my clients buy/build new homes over the years and would be happy to answer any questions you may have about the new home market.

 

Boise Homes For Sale: Photography

I see some pretty amazing photos of Boise homes for sale in MLS.

Examples include:

  • No front photo of the home.
  • Only one photo of the home.
  • One photo of the home uploaded to MLS 10 times.
  • Cars in driveways.
  • Toilet seats up.
  • Brutus the pit bull lying on the couch.
  • Fluffy the cat sitting on the kitchen counter.
  • Dirty dishes in the kitchen sink.
  • Cat box in plain sight.
  • Dirty clothes lying on the floor.
  • Window and door frames at odd angles (not shot level).
  • Hot spots caused by built-in direct flash.
  • Backlit photos (sun behind the house).
  • Dark interior photos (shot without flash/lights not turned on/blinds closed).
  • Proud owner standing on the front steps! 

Good photography is critically important to successful marketing.

That means shooting with a real camera and knowing how to use it.

Photos taken with a smartphone are not suitable for a variety of reasons, including direct flash, incorrect exposures, and poor depth of field.

That’s why I personally shoot my own photos using pro-quality Canon equipment.

I’ve learned, from experience, that I must often shoot ten shots to achieve a sharp, vivid, correctly-exposed image that I will use in my marketing.

That means shooting a lot of images to end up with enough good images to tell a compelling story about my listing.

For example, I’m now shooting a 5,200 sq. ft. custom home that I will be listing next week.

So far, I’ve shot more than 200 images during multiple visits to the property at various time of the day.

As of this morning, I have 31 stunning images.

I still have a few more shots to go and I expect to end up with about 36 images that meet my high standards.

After I get the shots I want, the next step is post-processing using several software programs and plug-ins to achieve crisp, sharp images that are accurate while avoiding over-processed enhancements.

In the end, it’s a lot of work but it’s worth it.

I have actually sold some of my listings sight-unseen to buyers who made their buying decision based  upon the quality of my photography.

 

Boise Real Estate: Telling It Like It Is

I have long practiced what I call “transparent real estate”.

I reveal everything (good and bad) to my clients so they can “see through” their real estate transaction with full disclosure and all facts on the table.

If you ask my clients, they’ll tell you that I’m their trusted advisor vs. someone who’s focused upon “closing the sale” or “getting the listing”.

In other words, I don’t talk anyone into doing anything.

Over many years, I’ve learned that it’s a lot easier to work with people who are motivated and capable than it is to convince (“close”) unmotivated prospects to act.

My clients hear both the positive and negative aspects of their proposed transaction without enduring the usual sales persuasion tactics.

If challenges arise during the course of the transaction, I share my concerns with them instead of concealing problems and pretending that everything is just fine.

It’s liberating to tell my clients the truth, educate and advise them, and then leave the decisions up to them because it removes the burden of persuasion from me.

Perhaps best of all, it allows me to face myself in the mirror without wondering if yesterday’s client will figure out the truth before closing.

Allowing my clients to “own” their own decisions also relieves me of the burden of having to convince them and keep them enthused until closing.

And, it also tends to result in a very high percentage of closings vs. sales falling through.

It has been years since I’ve had a sale fall through due to a client changing their mind!

 

How NOT To Choose Your Listing Agent

Here are the top ten reasons on how NOT to choose your listing agent:

10)  She’s your neighbor’s niece and you want to help her.

9)    She promises you the highest asking price for your home.

8)    She says she has a buyer for your home.

7)    She says her company is #1.

6)    She promises to hold open houses.

5)    She says she will advertise your home in a real estate magazine (with you in the picture).

4)    She’s excited and “thinks positive”.

3)    She has a team of 15 agents.

2)   She won the office listing contest last month.

And, the winner is . . .

1)   She has “Million Dollar Producer” license frames on her car!