Boise Real Estate Blog

Why Loyalty Matters To Your Agent

After 37 years of real estate, you’d think I would know how to avoid the pitfalls of the business, right?

Recently I was giving an out-of-town buyer a courtesy tour to educate them about the Boise area, in anticipation of their possible move to our area.

They had told me to they were going to relocate and that Boise was high on their list of relocation alternatives, but needed to visit and learn more about the area.

So, I agreed to give them one of my comprehensive local tours ~ a good faith gesture for someone who might become a future client.

I had been in contact with them for several months, had answered many questions by e-mail, and had arranged to show them around, plus show them a few homes.

They said they wanted a newer home, so I searched MLS and found some good examples.

As I pulled up in front of the first new home, they proclaimed “We don’t want to be in a subdivision!”.

Well, gee, folks, all of our new homes just happen to be in subdivisions!

In fact, when you stop and think about it, everything has been subdivided since the day our planet originated.

So, I left them at a local restaurant for lunch while I went back to the office to search MLS  so I could start over and show them old homes in old neighborhoods.

I retrieved them from the restaurant, resumed showing them homes, and while we were in the first home the wife answered a cell phone call.

I thought it odd that she moved to a corner of the kitchen and turned her back, and then I overheard her furtively say “Yes, we are looking for 1,500 to 2,000 square feet with four bedrooms and a three-car garage″.

Stunned, I realized that she was actually talking to another agent while I was showing her and her husband homes!

Kinda tacky, huh?

Kinda like being out on a date and having your date take a call from someone else in the middle of dinner, right?

I should’ve just taken them back to their hotel at that point, but instead, I showed them the remaining homes I had planned to show them.

When I finally took them back to their hotel, I asked them if they had talked with any other agents.

They admitted that they were going to be working with two other agents while they were in town.

They didn’t appreciate it when I explained that all agents work from the same MLS listing inventory and that no experienced, competent agent would give them the time of day if they learned that they were working with multiple agents.

Loyalty matters when you’re in a business where you only get paid for a closed transaction.

I try to give everyone a chance, but every now and then, someone gets to me.

October 27th, 2009 Posted in Buyer Stuff, Inside Real Estate |  Print This Post | No Comments »

The Truth About Million-Dollar Producers

If I weren’t in real estate, I suppose I might be more impressed at the sight of a real estate agent driving around in their leased luxury car with “Million Dollar Producer” license frames.

But, I am in real estate and I’m amused every time I see one of them!

Does anyone really care what an agent’s sales volume is?

Well, impressive as those $4 license frames are, here’s the straight scoop about how (un)impressive it is to be a “Million Dollar Producer”.

In real estate, we divide up each sale into a listing “side” and a selling “side” because most sales involve two agents ~ the agent who lists the home and the one who sells it.

And, we typically split the commission (usually equally) between those two agents.

So, if you assume a 6% commission (not always the case anymore, but a good example), each agent gets 3% of the sales price.

If you multiply the $1 million X 3%, you get $30,000 in gross commissions per agent.

But wait . . . there’s more.

Most agents split their commissions with their broker, and many agents typically get to keep 50-60% of their earned commissions.

So, let’s be generous and assume our agent is on the higher 60/40 commission split.

That means that 60% of $30,000 gross commissions now becomes $18,000 in net commissions to the agent after the broker takes his cut.

From that, the agent gets to pay for their car (figure $500/month = $6,000/year), their own health insurance (figure $400/month = $4,800/year), gasoline expended on free tours with buyers who don’t buy (at least another $200/month = $2,400/year), advertising, computer, internet, telephone, MLS fees, dues, E&O insurance, licenses, taxes on any remaining profit, etc.

In the end, our “Million Dollar Producer” hasn’t made a penny after expenses.

The truth is that our “Million Dollar Producer” doesn’t even have any money left over for groceries after expenses.

No wonder we have so many part-timers with “real jobs”!

In the real world of real estate, you don’t even start to earn a living until you sell several million dollars worth of homes each year.

But those license frames sure are impressive, aren’t they?

October 26th, 2009 Posted in Inside Real Estate |  Print This Post | No Comments »

The Truth About Floor Time

Back in the 1970’s, when real estate offices were usually co-located adjacent to the nearest grocery store in a shopping center, there was a phenomenon known as “drop in” traffic.

People would go to the shopping center to buy groceries, walk by a real estate office, gaze at the photos in the windows, and occasionally “drop in” to inquire about a home they had seen.

Predictably, those people were “just looking” and not likely to actually buy or sell anything.

The duty agent, aka “floor agent”, was there in the hopes that a real buyer or seller would show up, but floor agents were usually about as lonely as the Maytag repairman.

My best guess is that the last time anyone walked into a real estate office to inquire about a photo of a home taped to a window was probably around the time dinosaurs disappeared from the earth.

The exception to this is perhaps resort areas like McCall or Sun Valley, but the truth is that floor time is mostly unproductive for most Boise real estate agents.

For that reason, most offices no longer have floor time and instead route inquiries to the listing agent.

Or, they assign floor duty to the office rookies who have not yet realized that there are better uses of their time.

Fact is, experienced, successful agents will not take floor time!

October 24th, 2009 Posted in Inside Real Estate |  Print This Post | No Comments »

The Truth About Office Caravan Tours

I am sometimes asked by prospective sellers when my office will tour their home if they list with me.

The answer?

Never!

Fact is, very few real estate offices tour new listings anymore.

There used to be a MLS bus tour of new listings, but our Intermountain MLS scrapped that concept years ago due to lack of interest.

Office tours are an outmoded, ineffective real estate practice that was common in the 70s and 80s.

Granted, sellers will briefly experience a warm and fuzzy feeling as their new listing office parades its agents through their home as they parrot “You have a lovely home, Mrs. Smith!”

But, let’s face it ~ does any experienced, successful agent have the time to go on tour and look at homes for which they do not currently have a buyer?

Successful, experienced agents find homes matching their buyer’s needs by searching MLS.

Which leaves sellers with the inexperienced agents who work for brokers who require them to tour new listings in order to impress unsuspecting sellers.

October 13th, 2009 Posted in Inside Real Estate, Seller Stuff |  Print This Post | No Comments »

Boise, Idaho Real Estate Stats – September 2009

Here’s a snapshot of September’s real estate activity for Boise, Idaho (Ada County):

October 11th, 2009 Posted in Boise Market Stats |  Print This Post | No Comments »