What are you looking for …

… in a realtor?
 
With the changes in real estate practice brought on by the recent class action lawsuit against our industry, that question may be more important to you than before.
 
Briefly, in case you missed all the noise, a class action suit against the real estate industry alleging price fixing and collusion among realtors was settled in March of this year by the National Association of Realtors. The NAR (correctly) admitted no wrongdoing, but the settlement mandates two changes in the way we do business.
 
First, listing agents are no longer allowed to offer commission to buyers’ agents via an MLS listing. Second, buyers’ agents are no longer allowed to show listed properties without a signed buyer representation agreement.
 
Simple. But the ripple effects are more complex.

Despite the accusations in the lawsuit, realtor commissions have never been fixed or mandated. But post-lawsuit, the question of how, and by whom, the buyer’s agent gets paid has gotten more fluid and open to negotiation.
 
Traditionally, buyer agent commission was factored into the price of the house, offered to the buyer’s agent via the MLS listing, and paid at closing. This allowed buyers to pay their agent as a part of the purchase price of the house and amortize it over 30 years through the mortgage. 
 
But now, there are lots of open questions …
 
Can sellers still offer compensation to buyers’ agents? Yes. Just not through the MLS listing.
 
Will they? Well, they certainly should – assuming they want to attract the largest pool of potential buyers.

If not, how will the buyer’s agent get paid? A good question! It is possible more sellers will now decline to offer compensation to the buyer’s agent. If so, how will buyers pay their agent? Out of pocket? Maybe, but that can be a big chunk of change for someone working hard to scrape up enough for a down payment. 
 
Will lenders lend additional money to pay agent commission? Nope.
 
Will buyer agents work for free? Not a chance!
 
Can buyer agent compensation be worked into the deal through negotiation? Yes, it can.
 
Will the practical specifics of all this stay fluid and evolve over the next year or so? Almost certainly, they will. 
 
 So, what do you want in a realtor? I’ve got a list you might want to consider.
 
Someone who is …

• Well-trained. Who knows the process, knows what’s in all the contract forms, and knows why it’s there.

• Well re-trained. Only someone with solid basic knowledge (see above) can fully grasp how to work with the recent changes, and the changes that might lie ahead.

• Is supported by great brokers. Something new comes up in every deal. Every. Single. Deal. So, having accessible, knowledgeable brokers on hand for counsel is critical.

• Not afraid to advocate – for his client and for his own value. Honoring a client’s value as well as the value of one’s own counsel is fundamental to getting the best deal for a client.

• Not afraid to advise. Someone who understands his duty to advise a client on the best way to market a property, and the best way to write a winning offer.

Hmmm. Sounds a lot like me.

Losing Weight

I did a thing last week. I called a junk hauling company and had them empty my basement. I’ve lived in six different Nashville zip codes over the decades, and I get rid of things every time I move. But this was big. 
 
After sorting and organizing some tax and real estate files, and moving the file cabinets into a corner, I had the junk guys take everything else. No questions, no exceptions. I didn’t look at any of it. I’m not sure what all of it was, but it filled up their truck. And it’s gone.
 
It feels like I’ve lost 20 pounds. 
 
While not everyone is a full-on hoarder, we all do this to some extent – hang on to stuff that we don’t need, that we don’t even want, stuff that holds us down.
 
In the past 12 months, I’ve had six sellers who spent weeks – even months – clearing out so they could move. Deciding what to take, what to sell, what to junk. Hard, sometimes actually painful, work. Psychology underlying the issue aside, there are ways to avoid this extra weight, and make moving easier when the time comes.

The fact that I had a truckload of junk in my basement notwithstanding, compared to some friends, family, and clients, I’ve done a pretty fair job of keeping the accumulation down to a manageable level. Here are a few tricks I’ve used to make it happen. 
 
Throw as you go
One end of my guestroom closet is reserved for things that need to go to Goodwill, or the dump, or somewhere other than my house. When the corner fills up, I get rid of it. Right now, I have a basket of clothes and household items ready to go, and I’ll take it to Goodwill the next time I’m headed to Green Hills.
 
Take it slow
If you are facing tons of accumulated stuff, go easy on yourself. Be ruthless – gradually. Whittle it down one box, one closet, one basement at a time. I did this with books. At one point I had almost 600 books on the shelves. Little by little – a box at a time – I took more than half of them to McKay and sold them for cash. It took a year, but what a relief! 
 
Gift before you die
Why wait until you’re dead to give things to friends and family? Why not give it away now – when they can thank you in person. I’ve given lots of things away to family, and earmarked others as future gifts. But remember this: if friends and family don’t want it, it's likely no one else does either. (see below)
 
Remember, it’s only stuff
You can’t take it with you. If you don’t use it or want it, and no one else does (see above), why are you hanging on to it? It’s not relationships. It’s not experience. It’s not friends, not family. It’s none of the things that really matter. It’s just stuff!

Home is where the heart is

Over the nine+ years I’ve been doing my monthly message, I’ve made this point a number of times: A house is not a home. A house is where you make a home. Home is where – wherever – your heart is. 
 
Well, what’s true in personal life, can also be true in business. 
 
In November 2014, almost 10 years ago, I placed my brand-new real estate license at Village, a firm founded by local visionary, Mark Deutchman. On the advice of a friend who was a Village realtor, I attended one sales meeting and knew immediately – this was the place for me. I found a diverse group of like-minded individuals who formed a supportive community – always learning, always working for our clients’ success, and helping each other out. As independent contractors we were technically in competition with each other, but it felt like I had joined a team. And that felt really good!
 
Over the years, the company drifted farther and farther away from the community I joined. New ownership and leadership, a change in name (the Village brand ceased to exist), and finally a sale by the current owners to Compass RE, completed the transition to a company I no longer recognized.
 
And so, I’ve made a change.

On Thursday, June 27, I moved my license to Onward Real Estate.
 
Unlike Compass, a national corporation, traded on the NYSE and beholden to its shareholders, Onward is a brand-new, local company, owned by local people and focused on the local market. We are backed by Bob Parks, who built Parks Real Estate into the biggest firm in the mid-state before leaving that company earlier this year. Since going public three weeks ago, more than 220 realtors have joined Onward, and more are coming.
 
But this is about much more than size. It’s about focus. We are local. Every one of us from the leaders and brokers on down, live here and work here and are focused on our client’s needs and wants – in this market. 
 
It’s also about home. We do our best work when and where we feel at home and thoroughly invested. After several years of drifting away from the home base that was once Village, I’m back. And the vibe is good!

Back at home, and moving Onward.

Ch-ch-ch-ch-changes …

… sang David Bowie way back in 1971 – fifty-three years ago! (Wow! That went by in a hurry!) It was all about the weirdness of time and change, and the fluidity of both. 
 
I loved this tune when it first came out, and I love it still. Its message is universal. No one really “gets” time, but one thing is dead certain – time changes things, and us. No one and nothing is immune.
 
Another universal is that change drives real estate sales. When people’s lives change – birth, death, marriage, divorce, career, retirement – people tend to change where they live. 
 
Change can be good, or not-so-good. It can be hard, or really hard, or maybe not-so hard. But however it comes at us, change is a given. How do we handle change so it works for us, not against us, when we deal with real estate?

Look down the road
Embracing the inevitability of change, and keeping an eye on the road ahead, is a great way to handle change when it comes. Be ready – at least mentally – and when the change comes, it won’t throw you off your stride.
 
Be ready, stay ready 
Right now I’m working with four sellers who have been in their homes for 25 years or longer. None of these lovely people is a hoarder, but over time they’ve accumulated a TON of stuff. And it’s hard to deal with stuff. What to keep, what to toss, what to sell. How to deal with memories the stuff calls forth. Actively working against accumulation – making regular trips to Goodwill or Ebay, refusing to rent a storage unit – can make real estate change so much easier.
 
Learn to let go
I have a client who recently moved from a 2 bedroom, 2 bath condo, to a 1 bedroom, 1 bath condo and in the process had to deal with several truckloads of things she’d had forever, but had zero use for. Making decisions and actually watching it leave her life was tough. But now she says she feels lighter and happier without it. I’ve had the same experience. A good lesson for all of us!
 
Embrace the changes
This can be a tall order. Change is always challenging, and some change is hard to see as positive – in any way, for any reason, in any timeframe. But knowing that nothing stays the same forever, and looking for the doors that change almost always opens, is a great way to deal with the challenge. In my own life, I’ve dealt with changes that knocked me flat on my back, but every time I got back up and looked around, things were actually better. 
 
To quote another 1970s pop icon, Carley Simon, “these are the good old days!” And I’m looking forward to what’s up ahead.

Commissions, and rumors, and lawsuits, oh my … !

Over the past year you may have heard about a class-action lawsuit against the real estate industry alleging collusion, price fixing, price gouging, client abuse – all sorts of nefarious things. 
 
News media spilled thousands of gallons of ink, not to mention billions – maybe trillions – of pixels, on this story – boiling a complex situation down into simplistic terms that were often misleading and usually tilted toward the plaintiffs’ position.
 
The suit alleged that realtors were fixing prices by forcing a 6% commission on sellers which hurt both buyers and sellers by making the process unnecessarily expensive. If the prices weren’t “fixed” everyone could negotiate commissions – sellers could pay what they wanted to pay, and buyers could pay what they wanted to pay – and everyone would be better off. Real estate nirvana achieved!
 
However, the truth is that seller commissions have never been fixed. They have always been negotiable and voluntary. Most sellers agreed to 6% – to be split 50/50 with the buyer’s broker – because that was the best way to generate the most interest in the property, and therefore best way to get offers. 
 
On Friday, March 15, the National Association of Realtors announced they were settling the suit (caving, in the view of many of us) – resulting, according to the media, in big changes. No more “fixed” 6% commissions, transparent transactions, dramatic savings for clients, millions of realtors leaving the business. And so on …

The truth of the matter is different, and somewhat less dramatic, than you may have read. Here’s the deal – post-settlement changes boil down to two things:
 
One: The settlement prohibits listing agents from advertising via the multiple listing service (MLS) the commission they are offering the buyers’ broker. We can still offer 3% commission, and we can still advertise it – just not via the MLS. We will still offer it, and buyers’ brokers will still ask for it. As always.
 
Two: Buyers’ agents cannot show a property listed in the MLS without a signed Buyer Representation Agreement. This is a good thing. Signing a client to a listing agreement and/or a buyers’ rep agreement is the perfect opportunity for a clear explanation of commissions, who pays them, and how much they are. Conscientious realtors – like me – have always done this anyway, but now everyone will have to. 

That’s the upshot. Two changes.
 
Certain areas in the Northwest enacted these very changes several years ago, and they have had no appreciable impact on the market. So, on we go – more-or-less as before. Nashville realtors will still work hard for their clients and earn our commissions. Seems fair to me.