Why does the public think of real estate agents as salespeople? Why does the industry think of itself that way?
I suppose it is because we imagine that real estate agents sell houses in the same way that car dealers sell cars. In contrast, we don’t think of lawyers or doctors or accountants as salespeople. Why?
When it comes right down to it, isn’t every business a “sales” business? Trial lawyers need plaintiffs. Oncologists need cancer victims. Accountants need confused taxpayers (no trouble finding those).
Nothing happens in any business until someone is convinced to buy whatever that business is selling, be it a product or a service.
The real distinction comes when the sale is made. In a product business, the sale is the culmination of a process. You buy. You leave. You’re done.
In contrast, the sale is the beginning of a relationship in a service business. The trial lawyer files the case. The oncologist wheels you into surgery. The account starts finding deductions.
Now when I really stopped to think about it, years ago I realized that good real estate agents know that they are more than salespeople. They don’t sell houses, per se. Homebuilders sell houses! Homebuilders sell houses just like car dealers sell cars.
In contrast, real estate agents provide a service — more like the accountant and the lawyer. The process of buying and selling a house is complicated and most consumers need help. Agents are the people that have the specialized expertise. They can guide buyers and sellers through the maze of pricing, staging, marketing, financing, negotiating, inspecting and all the other aspects of a real estate transaction.
A real estate agent “sells” people on using her services and that is when the relationship begins. And if she is any good, she then becomes a consultant, helping people make good decisions about acquiring and disposing of their real estate. That is what the client really needs.
Of course, she does end up “selling” houses because some clients need to dispose of properties they own. However, she ends up helping other clients acquire property. In either case, her goal is helping people make great decisions about their real estate holdings and not to just make a “sale”. This builds a long term relationship of repeat and referral business rather than just creating a single transaction.
This is our focus at Colorado Home Realty. We are constantly rethinking the real estate business. Part of that rethinking is to shift from a sales mentality to a consulting mentality – from being in a product/sales business to being in a service/consulting business.
One of my strategies for success is to be more than a salesperson — to truly be your trusted real estate adviser for all your real estate needs.
Courtesy of Mike Cooke of Colorado Home Realty (c)
Thursday, October 30, 2014
Wednesday, October 22, 2014
DISINTERMEDIATION & Your Friendly Real Estate Agent
What Does a Good Agent Do For You?
You've probably never heard of "disintermediation" unless (1) You're an economist, (2) A complete nerd or (3) You attended the big Inman real estate agent convention in San Francisco earlier this year. We learned about it through option 3 with maybe a dash of option 2 thrown in.
Disintermediation is when intermediaries are cut out of a supply chain. More simply, it's when you "cut out the middleman".
The Internet has created a lot of disintermediation. The travel agent business is a good example. People can go to any number of websites to get much of the info they use to get from a travel agent. So there aren't as many travel agents these days.
The discussion at the Inman conference was whether this same thing would happen to the real estate brokerage business. Do websites like Zillow and Trulia create a situation where buyers and sellers just get together directly, eliminating the need for an agent? Is the agent a middleman, providing little value?
The most definitive answer is "NO" and it comes from a surprising source - from Spencer Rascoff, the CEO of Zillow - the 800-pound gorilla of real estate websites. He also created Hotwire, the popular travel-booking site. He was asked earlier this year why Zillow partners with real estate agents instead of trying to replace them like he did to travel agents.
Rascoff, insightfully and accurately explained the differences between booking an airline flight and buying or selling real estate when he said:
"There will always be a real estate agent in the transaction because, for most consumers, it's just too important and too expensive and too infrequent and complex to screw up, so they need an agent."
We agree. Rascoff's conclusion is supported by the most recent survey of homebuyers and sellers nationwide. Over the 12-month period studied, 89% of buyers reported using the Internet to search for homes, but this did not eliminate their need for an agent - 89% of those buyers also used a real estate agent. For sellers, 90% used a real estate agent.
Rascoff went on to say he believes the Internet is changing the role of the agent from information gatekeeper to skilled transactional guide with expertise in marketing, negotiating and local market knowledge. We disagree.
In our opinion, the role of a good agent has always been to be much more than an information gatekeeper. Rascoff forgot to mention skilled pricing analyst, exceptional stager, financing guru and savvy legal-beagle when it comes to contract preparation.
An agent we heard recently tell a compelling story of his first home buying experience before he was an agent and long before the Internet existed. This agent was buying his first home and wanted a ranch style, single-family property with 2 bedrooms and a basement in a certain area. He explained all this to the lady he selected to be his agent.
His agent showed him what he wanted to see but also showed him a duplex in an area he had never considered. It had everything he wanted plus hardwood floors that complimented his furniture and a renter next door that paid the lion's share of the mortgage. She negotiated a great deal on it and skillfully guided him through the whole process. He says it is the best real estate he ever owned and the best real estate experience he had as a consumer.
As an agent with CHR, we share this vision for the role of a real estate agent. At CHR, we are skilled advocates that bring our expertise in pricing, staging, marketing, financing, negotiation and contract preparation to bear in helping home buyers and sellers.
And for agents in this industry that aren't passionate about this expansive role, we are happy for them to be disintermediated.
Courtesy of Mike Cooke at Colorado Home Realty (c)
You've probably never heard of "disintermediation" unless (1) You're an economist, (2) A complete nerd or (3) You attended the big Inman real estate agent convention in San Francisco earlier this year. We learned about it through option 3 with maybe a dash of option 2 thrown in.
Disintermediation is when intermediaries are cut out of a supply chain. More simply, it's when you "cut out the middleman".
The Internet has created a lot of disintermediation. The travel agent business is a good example. People can go to any number of websites to get much of the info they use to get from a travel agent. So there aren't as many travel agents these days.
The discussion at the Inman conference was whether this same thing would happen to the real estate brokerage business. Do websites like Zillow and Trulia create a situation where buyers and sellers just get together directly, eliminating the need for an agent? Is the agent a middleman, providing little value?
The most definitive answer is "NO" and it comes from a surprising source - from Spencer Rascoff, the CEO of Zillow - the 800-pound gorilla of real estate websites. He also created Hotwire, the popular travel-booking site. He was asked earlier this year why Zillow partners with real estate agents instead of trying to replace them like he did to travel agents.
Rascoff, insightfully and accurately explained the differences between booking an airline flight and buying or selling real estate when he said:
"There will always be a real estate agent in the transaction because, for most consumers, it's just too important and too expensive and too infrequent and complex to screw up, so they need an agent."
We agree. Rascoff's conclusion is supported by the most recent survey of homebuyers and sellers nationwide. Over the 12-month period studied, 89% of buyers reported using the Internet to search for homes, but this did not eliminate their need for an agent - 89% of those buyers also used a real estate agent. For sellers, 90% used a real estate agent.
Rascoff went on to say he believes the Internet is changing the role of the agent from information gatekeeper to skilled transactional guide with expertise in marketing, negotiating and local market knowledge. We disagree.
In our opinion, the role of a good agent has always been to be much more than an information gatekeeper. Rascoff forgot to mention skilled pricing analyst, exceptional stager, financing guru and savvy legal-beagle when it comes to contract preparation.
An agent we heard recently tell a compelling story of his first home buying experience before he was an agent and long before the Internet existed. This agent was buying his first home and wanted a ranch style, single-family property with 2 bedrooms and a basement in a certain area. He explained all this to the lady he selected to be his agent.
His agent showed him what he wanted to see but also showed him a duplex in an area he had never considered. It had everything he wanted plus hardwood floors that complimented his furniture and a renter next door that paid the lion's share of the mortgage. She negotiated a great deal on it and skillfully guided him through the whole process. He says it is the best real estate he ever owned and the best real estate experience he had as a consumer.
As an agent with CHR, we share this vision for the role of a real estate agent. At CHR, we are skilled advocates that bring our expertise in pricing, staging, marketing, financing, negotiation and contract preparation to bear in helping home buyers and sellers.
And for agents in this industry that aren't passionate about this expansive role, we are happy for them to be disintermediated.
Courtesy of Mike Cooke at Colorado Home Realty (c)
Friday, October 17, 2014
A Buyer's market in the Denver Luxury Home Market
"Inman Connect" is a semi-annual, national conference for real estate agents. At the most recent gathering in June of this year, held in the beautiful city by the bay (San Francisco), we heard a lot of discussion of the luxury home market.
What is a luxury home? Are different strategies required when you are buying and selling in this market segment?
A common definition of "luxury" is that it is the top 10% of any market. It got us wondering about what that looks like in Denver. What is your guess - what is the home price that puts you in the top 10% of the market?
You'll find the answer below, but make your guess first.
Really.
Guess.
Stop.
Don't peak!
Do you have your answer?
The answer for metro Denver is $525,000. Ten percent of the residential properties in metro Denver that sold over the last 12 months had an asking price that was above $525,000.
Does that surprise you? It surprised us. We thought the number would be higher.
Here are some additional facts. The cutoff for the top 5% is only $600,000. Move up to $1,001,000 and you are in the top 2%. If the digs you come home to every night has a price tag of $1.5 million, then 99% of the properties in the metro area are less expensive than yours.
The supply and demand pattern is different also. While houses with a price at $525,000 or above make up only 10% of the sales over the last 12 months, they currently represent 37% of the available inventory.
In other words, almost four out of every ten houses on the market right now has an asking price over $525k. This represents 7.8 months of supply - it would take 7.8 months to sell all these homes if no more came on the market. In contrast, there is only 1.5 months of supply for homes under that price point.
Traditional wisdom says that inventory of less than three months is a seller's market while inventory greater than 6 months is a buyer's market.
We see the effect of this large inventory in the time it takes to sell upper end homes. Half of the homes under $525,000 that come on the market will find a buyer within 11 days. Above $525,000, it is taking 80 days on average to find a buyer.
What does it all mean if you are in that "luxury" market of $525,000 and above? If you are a seller, you are in a bit of a buyer's market. You have to be more accurate with pricing and your are very unlikely to have that multiple offer feeding frenzy that you hear so much about these days.
If you are a buyer, ditto. It is a bit of a buyer's market. It is an excellent time to make a move up into this range, especially if the house you have to sell is in that heart of the market at $350,000 and below. You get to sell in a seller's market and buy in a buyer's market. In other words - it is pretty much real estate heaven.
Courtesy of Mike Cooke at Colorado Home Realty (c)
- See more at: http://juliereddingtonrealestate.com/a-buyers-market-for-luxury-homes/#sthash.tziA2fJQ.dpuf
Saturday, October 11, 2014
Home in The Backcountry, Highlands Ranch
A fantastic upgraded and immaculately finished home in the prestigious community of the BackCountry, in Highlands Ranch
Hardwood floors.
Gorgeous kitchen with beautiful granite countertops, pantry, large gas cook top and stainless steel appliances.
4 upstairs bedrooms with upper laundry and views, views, views!
Low maintenance yard fire pit, with sand pit, practice sport court, area for trampoline.
Surround sound system, mud room.
Check out the community of Backcountry featuring the Sundial House, miles of open space and trails, parks, resort style outdoor swimming pool, Peaks Pub, fitness and movement rooms and an outdoor amphitheater. Check out website for more information http://backcountryco3.reachlocal.net/community-of-the-year/
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