How Realtors Sell Their Own Homes

Click on the title to link. This is an interesting article about whether Realtors sell their own homes for more than their clients, and, if so, what they do to do so.

The article says:

Most people have heard of the well-publicized statistical evidence that that when real estate agents sell their own homes, they tend to keep them on the market longer (by about 10 days) and get a higher sale price (by about 3%) than when they sell homes for their clients.

The article does point out the fact that the folks who wrote a book about this conclude that it must be greed on the Realtors part (in essence) because the additional commission is so little that they figure why bother getting a little higher price for a client. That's quite the leap, don't you think? That reminds me of this time I saw an elephant at the zoo, and, of all things, a pink crayon on the ground by their cage. I naturally concluded that there must be pink elephants then. Oh, wait...

That's the same stupid logic that the author of the book has taken. Let's take the facts instead of jumping to ridiculous conclusions.

1. Whose the seller the Realtor is dealing with when they sell their own house? That's right, themselves. I think they now best their own tolerance for risk, and what they will or will not take. When dealing with clients, all you can do is present the facts and let the sellers make an educated decision. One of those facts will be that they could turn down offer X in the hopes for another 3% (let's just use the same percentage the book says Realtors make more of when selling their home). I don't know many people who would jump at that offer unless they were hell bent on a certain price.

2. With knowledge comes power (or so they say). The job our any Realtor (or lender, for that matter) is to educate people so they can make the best possible decision for them. However, that is not always easy. People hear what they want to hear. So I could tell you that you should probably reject this offer and wait for a better one. But that does not mean you are going to listen to me.

Anyways, there are more that we could go on with. The bottom line is this...I have no doubt that Realtors make more on their homes than their clients when they sell. But that because they know the seller better than anybody else (themselves), and they know exactly what to do because they do it for a living (hence the fact that their homes are also on the market 10 days longer; they trust what they know). I'm not saying you need a Realtor to sell your home. But if you use one, then make sure you work with one you trust 100%. Get referrals, do not work with those you run into at an open house.

We work with phenomenal Realtors. If you need their services than the place to start is here with us so we can get you with one that we know will treat you like you should be treated. So give us a call.

10 Ways to Boost Your Homes Sales Price by Spring

Click on the title to link. For any of you thinking about selling this spring, this has some great ideas to help you boost the sales price of your home. We are always here to answer any questions for you regarding the process. If you need a referral to a good Realtor then we have those also.

Which is better: Salaried Loan Officer or Commissioned Loan Officer?

There's long been a heated debate in the business community about which is better: Sales people who are paid a salary, sales people who are paid 100% commission, or sales people who are paid a base salary plus commission/inventive pay. The mortgage industry is no exception when it comes to this debate.

There are, I believe, valid arguments for all of these arrangements. For most issues (not all, mind you), there generally are solid arguments for all sides of said issue. However, as it relates to the mortgage industry, it's not uncommon to hear advertisements on radio and television telling the consumer they'd be much better off working with a lender/broker who "only uses salaried loan officers".

The implication here is clear: by using a salaried loan officer you are less likely to encounter a rogue loan officer trying to squeeze extra money out of an unsuspecting borrower. I'd argue that you are not at all less likely to encounter this scenario with a commissioned LO. The truth is, a shady loan officer will be shady no matter how he or she is paid. Furthermore, a loan officer is likely to feel just as much pressure to perform if they are on salary as they are if they are on commission, albeit for different reasons. In fact, the loan officer who is paid on salary is more likely to feel pressure from their managers to perform, given the company is on the hook for the salary regardless of the loan officers production. You may, however, find that a commissioned LO is willing to work harder for you, though again, the hope is that the LO will work hard for the borrower regardless of how he or she is paid, simply because they understand the value of serving the client to the best of their ability.

As owners of our mortgage company, we obviously cannot escape the truth that we are by definition 100% commission. Why would that be a good thing for us (or any other business owner), but a bad thing for the LO's who work for us? The point is that it is more an issue of who you work with than how they are paid. We take great care in making sure we only hire LO's who we believe are committed to doing things the right way, with the highest level of integrity. That way, whether they are paid a salary or commission, we can have confidence that they will treat you, our clients, the same way we would.