Wednesday, October 31, 2007

L.A. Times: Motivated folks only

Realtors are starting to practice tough love, according to this October 28 article by Ann Brenoff.

Agent Walter Sanford is advising realtors to "dump the buyers" (i.e., the looky loos) and invest the time and money in obtaining listings of motivated sellers. To court looky loos with the housing market in the condition it is in will be inviting financial ruin, since buyers take longer to make decisions, they "nibble", and they drain your energy as you show them house after house after house and they still don't buy anything.

Some agents keep potential buyers on email lists that automatically send the buyers notices of new listings, price drops, and other changes (ZipRealty anybody?) One realtor says, "If they see something they like, they call me. [E-mail is] working just fine."

Agent Sanford wants to grill buyers with a 35-question form that asks questions like "Why haven't you bought yet?" Buyers must be pre-qualified (not just pre-approved by a mortgage broker) with a commitment by a lender. (Smart move - how many times have we heard stories about escrows failing because the buyer couldn't get a loan?) And then the buyer must commit to a loyalty agreement, to prevent the buyer from hopping from agent to agent.

But it's not all one-sided. Sellers are being told to wake up, though not put in those words. They just aren't going to be able to sell for what they think the home is worth, and if that isn't good enough, then they should defer their sale plans. Tough love. Sanford calls inflexible sellers "cement-heads."

By Sanford's estimates, 30% of experienced agents are turning down overpriced listings.

One realtor named Lonnie Maples described one listing he turned down. It would have cost him $100 a week to advertise the listing, plus have fliers printed, lock boxes installed, and mailings sent out. He said it is better to "catch" the listing on its second or third attempt, once some sense has been knocked into the seller and he is now facing reality (Maples didn't put it that way exactly...)

Other realtors agree to a listing for just a few days or weeks, only if the seller agrees beforehand to drop the price if the listing does not sell.

A Pacific Palisades realtor named Anthony Marguleas says he never walks away from listings, period. He feels it is the agent's job to educate the seller on the realities of the market and show him why his $1 million home won't sell for $2 million. "It's our job to not let him make a mistake." Marguleas calls agents who put buyers on the back burner just "plain's actually more than lazy, it's insulting. Buying a home is the largest investment of someone's life, and an agent doesn't have the patience or time to show them homes anymore? That's not right."


Blogger Mike said...

for some reason i found it hard to evoke much sympathy for the poor realtors who are actually having to start working for a living.

8:22 AM, November 01, 2007  
Blogger bearmaster said...

LOL ! I know what you mean. They are admitting that just a few years ago they were nothing but order takers.

I see nothing wrong with putting half-hearted buyers on an email list. Let technology do some of the work for you.

But I like the attitude of that Pacific Palisades realtor who says it's his job to make sure a seller doesn't make a mistake in terms of asking for a fantasy price for a house. He wants to issue a big dose of sense to the sellers. Nothing wrong with that either.

8:52 AM, November 01, 2007  
Blogger Jennifer said...

That article is crap. How much did the NAR pay the LAT to run that??

Realtors in my area (WLA) will take ANY listing, regardless of how overpriced it is. And, they will hold it open EVERY weekend for 6 months straight and STILL not knock more than 5-10% off the price. They are hungry, and all but the stupidest of buyers know it.

12:43 PM, November 01, 2007  
Blogger bearmaster said...

The realtors in WLA and the westside are probably still delusional about the affluent areas being immune to a big slump. Only a few realtors even have a clue that foreclosures are creeping into those areas.

The final October sale numbers were posted today on Melissa Data. I'll be publishing October dollar volume transaction charts this weekend and they aren't pretty. This is the worst month the beach cities have had in a while.

12:55 PM, November 01, 2007  

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