Here's a response I just posted on a blog that was talking about FSBOs.  Feel free to use it to explain your perspective to clients.  PLease give me proper attribution and a link to my website if you quote it.  Thanks!

 

Regarding FSBOs

I think the challenge is not in the offering of options or in who owns what company.  The challenge is in the comments above where people referenced the "useless"ness of real estate agents.  Everyone seems to think that selling property is easy.  The consumers believe it, and even many of the new agents who get into the business believe it.  That's why there's such a high turnover in our new agents.  No one, but those of us who have done this for years, knows how hard it is. 

Every year there are more laws put in place, more complications created, and more challenges to work through.  Especially now, as prices start to drop, people come after the agent's commission.  The problem is, that the agent has already taken a pay cut when prices went down.  They get paid as a percentage of the purchase price.  Plus, they're selling fewer houses, so they're getting it both ways.  And yet sellers still think that asking the agent to cut the commission further is the answer.  Agents work harder in difficult marketplaces.  They should be paid more, not less.  That's how it would work in other industries that are based on per-hour basis.

But the problem is that the consumer doesn't see the value.  They have no idea how much work goes in behind the scenes.  And that's the agent's fault for trying to make it a seemless process.  The better they are at their job, the less the clients appreciate how much work there was to do.  Agents need to let the client in on how much they are doing for them. 

There are many details that have to be handled in the standard transaction. 

1)  Pricing the home properly (a place where many FSBOs fail miserably)
2)  Writing good ad copy (which is an art)
3)  Posting information on the MLS that makes the house look attractive to the right buyers (another art)
4)  Creating and maintaining good relationships with other agents so that they are inclined to show your houses first
5)  Having great communications and problem-solving skills for dealing with issues that may arise in negotiations, inspections, loan approval, appraisal, etc.
6)  Being able to soothe bruised egos and smooth over ruffled feathers when emotions run high and risk destroying the sale for no good reason
7)  Having relationships with good contractors so that needed repairs can be done in a timely fashion so that they don't delay closing
8)  Having good relationships with town officials so that issues there can be resolved quickly

There are many other skills that come into play on only a few transactions each year, but on those transactions, these skills are critical.  Much of the work agents do is ongoing non-transaction-specific (like the relationship development and management), but they are still time-consuming. 

When you hire an agent, you're hiring them for their expertise in the industry, not just to put your house in the paper or on the web.  You are investing in the knowledge, experience, and problem-solving skills of that person.  A good agent can mean the difference between your house closing or the deal falling apart at the closing table when all of your possessions are sitting on a truck waiting to go to your new home which won't close because your house didn't sell.

Some FSBOs are experienced enough to do the majority of the work themselves.  Most aren't.  This is why 85% of them end up listing with an agent eventually.  The problem isn't the FSBOs.  It's the lack of appreciation for how much work it takes to sell a home and to keep the deal together through closing.

Kelle Sparta
Author of The Consultative Real Estate Agent - Building Relationships that Create Loyal Clients, Get More Referrals, and Increase Your Sales, and founder of Sparta Success Systems, a real estate training and tools company that focuses on helping agents and brokers create lives and businesses they can love.  www.spartasuccess.com

I was thinking more on the multiple pillars of income concept.  Here's another thought I had for leveraging our potential for income.

Start a Junk Company:
Many of us have houses filled with lot of great sellers' castoffs including plants, furniture, lawn equipment, etc.  There is much more too that sellers leave behind that we just can't fit in our houses. 

Consider starting a junk company.  You could have a mover you work with locally who will pick up the items, deliver them to a warehouse or storage area.  You could partner with someone who sells on eBay and let them do the selling of the items while you go on with your business and split the profits with them.

That's about as close to free money as I can think of.

Have a great day!

One of the great secrets of the wealthy people of the world is that they all aspire to have multiple sources of income - preferably sources that don't require them to do anything in order to create money.  This is the way that the rich get richer - they leverage their knowledge or their money to make more money. 

Being in a service business, it is often difficult for agents to think about how to create another source of income.  You are probably overwhelmed with the work you're doing now.  But consider this - come the winter time, your business will slow down again, and you'll be wishing you had something to pick up the slack. 

Many agents do the obvious and invest in real estate.  This is certainly a good option - especially given the tax incentives.  But once you've invested in real estate - now what?  How can you leverage your knowledge to create even more income? 

There are a couple of options that I can imagine.  You could write programs and reports that you could market and sell to buyers and sellers across the country on the web.  You could take those leads and refer them to agents across the country to get referral fees.  In this way you would get a double bang for your buck.

Or, perhaps you'd like to help your fellow real estate agent.  Consider writing a program or sharing a tool you've found useful.  Could you compile a package of all the ads you've had success with over the years and sell them to other agents?  Sure you could!  In fact, if you don't want to go through the trouble of marketing the material yourself, let us know.  We're always looking for good material that is in alignment with our values structure.  If we like your stuff, we'll rep it for you to the real estate world.  Then, you can sit back and collect the commissions.  What could be easier?

Can you think of another way to leverage your knowledge of the business?  Share it with us!  I've been doing some creative thinking on how to make life easier for agents.  I'll be doing some brainstorming on the subject with others as well.  I'll let you know what I come up with.  But in the meantime, share your ideas - we'd love to hear them.

Have a great week!

Johanna Webster broker/owner of ERA Home and Family Real Estate in Andover, MA talks to us about what to do when there is a shortfall at the closing table and how to avoid getting into that situation in the first place.  With over 20 years of real estate experience and an average of $35-$40,000,000 in production each year (personal production - no team), Johanna is an excellent source of knowledge for the industry. 

Exit Golden Triangle Realty is hosting an event on June 8th in Worcester, MA that I'll be teaching called

There's No Excuse for Having No Leads!

This is going to be a great event for getting you to think outside of the box in terms of your prospecting.  Click here for more details.

This week we discuss the market slow down we've been seeing across the country and how to handle it.  I also share a story with you from my time selling.

Thought I'd let you know a little about me for a change.  I've been going out dancing recently.  I've been taking classes in salsa, cha cha, foxtrot, merengue (sp?), and other dances.  I've really been enjoying it.  It gets me out of the house in a social setting and it gives me some exercise, which has been great in facilitating my weight loss program (30 lbs down and counting). 

The thing I love about ballroom and latin dancing is that it's so non-meat-market.  I can go to one of these events by myself and I don't feel out of place.  People talk to me, they ask me to dance and they are open if I ask them to dance.  I go out, have a great time, meet some new people, and get a lot of exercise.  What could be better? 

Of course the downside is that I've been limping around for the last couple of days because I overdid it a little on Friday.  :-)  But I'd rather be limping because I had too much fun, than miss out on it altogether.  Now I'm off to stretch...

Danyl Collings has been an agent for two years.  He has managed to survive the start-up phase.  In this interview, he shares the secrets of his success.  He also shares his secret for getting 4-6 people to call him about real estate matters from each of his newsletters.

NOTE!
This file is 15 minutes long and thus will take some time to listen to if you are clicking on the link.  Be patient.  If patience is not your strong suit, then right click on the file name below and click "Save Target As" and then save the file to your hard drive.  Then, when you double click on the file, it will play in whatever media player you have as your default for your system (usually Windows Media Player if you haven't set another one).