Category: The Industry

The Internet Revolution

It’s going on right now, today, in Egypt.

Egypt is right at the top among Arab Nations in Internet use.  Facebook has huge penetration there compared to neighboring Arab States.  Twitter, too.  The Internet and Social Networking are driving the uprising that’s going on right there, right now.

I realize that the revolt is being led by the Muslim Brotherhood, a group that believes Islam is more than a religion and who may turn Egypt into an Islamic State if they prevail.  Notwithstanding the difficulties we’ve had with Islamic States, the Egyptian version of this group seems more moderate.  Regardless of their ideology, it’s clear that the Internet has played a key role in this little bit of history.

It’s no wonder the Egyptian government shut down virtually all Internet access last night.  It’s their last ghasp attempt to control the situation.

Reminds me of the old days of Radio Free Europe:  we were trying to create a revolution with information.  I’m not sure how successful that was, but clearly, when people have access to information on a global scale, when they can see what they have and what they might become, they grow very impatient with their own oppression.

I’m not surprised at China’s attempt to filter the Internet and I’m delighted that Google made the decision to pull out of that market rather than buckle to their demands.   I mean:  it’s kinda hard to keep people under your thumb when they can see alternatives at the click of a mouse.  Can you imagine what will happen when the citizens of China, Iran, North Korea, and any number of other repressive nations gain free access to the information we all take for granted?

To quote Shirley Bassey, it could ‘all be just a little bit of history repeating . . . ‘  Like the fall of the Berlin Wall.

(ok, get ready:  here comes the tie-in)

It’s not unlike the struggle of home buyers and sellers over the past 30 years.   They were at the mercy of Realtors who held information hostage – information about houses for sale, prices, trends.  The only way consumers got the information they needed to make intelligent choices was through a Realtor.

Though the Realtor community fought tooth and nail to keep all that delicious information under lock and key, the courts and the consumers won out in the end.  Today consumers can get almost all of the information real estate people once hoarded and held from them.  Suddenly, the value of the Realtor had to shift.  Value could no longer simply be access to information.  Now the Agent or Broker had to actually bring some skill to the table.

To all this, we at Help-U-Sell say Bravo!  Information without obligation has always been one of our core values.  We’ve always believed in giving the consumer all the information they might need to make intelligent decisions.  Our value is in marketing, advising, coordinating, selling, negotiating.

So, Viva Internet!  Viva Egypt!  Viva free access to information!  and Viva Help-U-Sell!

What They Think of Us and Why They Miss The Point

Matt Kellam sent me a link to a post on BrokerAgentSocial.com from a traditional broker (a CRB) about the disappearance of ‘Discount’ Brokers.  As I read the thing it was clear he was mostly talking about us.

I was struck by how off-target the piece was as well as most of the comments to it.  If you’re curious, this would be a good time to jump off and read it — but come back when you’re through.  Here’s the link:

Whatever Happened to Discount Brokers?

First off, they call us ‘Discounters.’  That’s not new.  But it’s just as false today as it was 5 and 10 years ago.  Calling us ‘Discounters’ assumes that we take their ‘Full Service’ model, strip out the more expensive aspects of it and offer the stripped down model at a lower price.  The truth is:  we strip nothing out.  We do the same things they do (and really, this is no bull: we do more), but we price our services differently so the seller saves on the deal.

Ordinary brokers who know nothing but what they’ve always done take a look at our pricing and try to imagine what their operation would be like if they priced their services that way.  They imagine it would be a disaster . . . and they would be right.  If you put our pricing on their business model, it would fail.  It has failed.  It will always fail.  And you don’t have to be Warren Buffett to figure it out:  If you’re not making any money doing things the way you’re doing them, you’re certainly not going to make more by cutting your revenue.

But, they see us continuing to survive, even thrive and there is a disconnect.  (‘How can those guys afford to stay in business?? There must be some secret!’ ) So they speculate on what that secret might be, and that’s where the spin doctoring  in the BrokerAgentSocial.com post comes from.  It’s stuff like:

  • We rely on the Internet to make our model work and rely less on brick and mortar offices.

That’s not entirely false.  We do exploit the power of the Internet as much as possible to generate leads into our offices.  We’d be foolish not to, wouldn’t we?  And, we’ve always been able to get by fine with smaller physical offices because our model allows a small number of people to do large numbers of transactions.  Don Taylor decided 35 years ago that he was in the business of selling real estate, not in the business of providing a palace for agent-princes to use for coffee time.  We have never needed 200 agents to generate a profit.  We do it with 5 or 6 people; so the 10,000 square foot, Taj Majal office is unnecessary.

  • We use loss-leader pricing on listings and use them to snare buyers to whom we sell full commission MLS listings.

Our seller offering is not a loss leader.  We set our fees based on what it will take to market a property and make a reasonable profit.  I know it was misguided, but 5 and 6 years ago, many Help-U-Sell Brokers made great piles of money just working listings with set fee pricing.  They didn’t even think about the buyer side.  Today we know very well the folly in ignoring the buyer and we aim for a 50/50 mix of buyer sides to seller sides.  What’s different is that the profitable low set fee offer to the seller makes inventory building easier; and a large inventory generates a strong flow of buyer inquiries into the office.  We teach our brokers to create buyer agent compensation on Help-U-Sell office listings that is equal to or greater than what the agent would be paid on an MLS listing so there is always an incentive for our agents to sell our listings first.

  • We use our pricing to get us face to face with a seller and then tack on fee after fee with our menu-of-services.

I guess they think we rent the for sale sign to the seller for $50 a month and flyers are $.25 apiece and helpusell.com costs an additional $2,000.   Really:  the only thing we ‘tack on’ is the other agent.  We make that outside agent an option.  And several years back, may sellers passed that option by because they believed — rightly so — that we could get the job done without it thus saving them a lot of money.  It still works today with a properly priced equity seller.  And, even when they take the option of offering the property for sale through MLS (and then being prepared to pay the outside agent and broker), they will only pay a fee based on how the property actually sells.  So the seller who takes the option at listing who then holds his own open house and thus finds his own buyer, will only pay the Help-U-Sell low set fee.  It’s like:  the breakfast buffet is $10.95, but if you just have fruit, cereal and yogurt and find you don’t need the eggs and bacon, it’s just $4.95.  Makes sense, doesn’t it?*

When they call us ‘Discounters’ they miss the point.  It’s not a discount.  It’s a completely different way to price our services to sellers.  By itself and plugged into the old, tired, agent-oriented business model that is the norm today, it is a disaster.  But that’s not what we do.  We back up the pricing model with a completely different operating system that makes it work beautifully.

When Charles Schwab revolutionized the securities business, he was chided as a discounter.  The old boys couldn’t imagine how they could operate (and pay their brokers) on $15 a trades.  Today the old boys are all pretty much gone, and compared to Schwab, ETrade looks like a discounter!

I keep wondering how long it takes a dinosaur to turn into an oil deposit.

What Is Your REALTOR Membership Worth?

There’s news this week of a large (450+ Agents) brokerage in Columbia, SC dropping its REALTOR membership.  There are a couple of factors in the decision:

  • Many of the agents don’t see a value in belonging and are balking at paying their $400+ share of dues.
  • REALTOR policy on dues dictates that a Broker is responsible for the dues of his/her agents, and must make up the difference if agents don’t pay.

The firm’s owner points out that in the current climate, that policy could cost his company upwards of $100,000, so the solution is to simply drop out.

Columbia, SC is a special circumstance:  while most MLS’s are owned by REALTOR Associations (and thus, become a major benefit of belonging), the Columbia MLS is privately held.  The firm can drop their REALTOR membership and still belong to the MLS.

So, this bit of news begs a question:  If you take away the MLS, what is the value of your REALTOR membership?

There seem to be two sides to this coin.  The dark side says:

NAR and its affiliated State and Local Associations and Boards are tyrannical pseudo trade unions that, under the guise of protecting the public and upgrading the industry, fight tooth and nail to preserve the status quo.

But on the other side, in the light, I hear:

  • REALTOR educational opportunities are outstanding, so much so that I routinely tell people if they want to know how to list and sell real estate, go to their local Board.  We can teach you the Help-U-Sell way to approach nearly everything, the way that makes us different and special.  But if you just want ideas on how to show a house or call on a FSBO, that’s generic real estate and it can be learned at the Board.
  • REALTOR Associations are constantly upgrading the tools of our trade.  Advances in technology, driven mostly by MLSs — which are, again, mostly owned by REALTOR Associations — have moved us light years ahead of where we were just a few years ago.  And that not only benefits real estate professionals, it also benefits consumers who have very good tools now for accessing information and participating in the home search and sale process.
  • NAR and the State Associations are a powerful force for housing friendly legislation.  Their lobbying efforts have benefited everyone pursuing the American Dream of Home Ownership for decades.  Often it is the REALTOR voice on Capitol Hill that keeps sanity in the mix.  How important is this?  Right now, NAR lobbyists are fighting hard to preserved the mortgage interest rate deduction for homeowners.  Congress, in an effort to find more dollars for the deficit, is actually considering ending that great benefit of home ownership.  We’ve faced similar challenges through the years and I’m proud to say the REALTOR voice – the voice of reason – usually prevails.

It’s unfortunate, but this year I think REALTOR Associations across the country are suffering.  Membership is dropping and it’s not just that big firm in South Carolina I’m talking about.  The tough market has driven many from the business and often it’s the annual event of DUES that forces the decision to get out.

I also think REALTOR Associations have to examine the benefits package to members as well as their policy on dues.  I believe the days of the proprietary REALTOR-only MLS are numbered.  Consumers already have access to much of that information online.  So the MLS, while high on the list of benefits, can’t be the biggest reason agents and brokers pay their Board Dues.

What do you think?  Why do you pay your dues?  What’s the biggest benefit you see?

2010 – The Year In Review

2010 was a great year for Help-U-Sell Real Estate.
As we continue to re-tool our technology to lead the industry in systems for the broker and the consumer, we experienced a number of milestones.  The first quarter saw a buildup of excitement as we worked toward the rollout of the Help-U-Sell Broker websites in March.  They were introduced at the Tech Summit programs held in Sarasota and Las Vegas.  Brokers from across the country attended the events, got excited as they learned about the new tools, and enjoyed reconnecting with other Help-U-Sell brokers they’d not seen in many months. Rallies were also held across the country and weekly training and round table calls saw plenty of great ideas and content being shared amongst brokers.
Thank you for being part of this magnificent team.  There is no lack of passion in Help-U-Sell and that is an energizer for all of us.  Let’s all work to make each other proud in 2011!

Gains in Technology
During 2009 we moved our corporate website and email into our own control and onto our own servers. We also started working with focus groups to drive the direction of the new broker websites which were revealed at the Spring Technology Summits. Since then the broker websites have been tweaked and new features have been added.
Being able to build our websites to suit our brokers needs in today’s ever-changing internet world is just one of the many benefits of building our technology in house. This also provides us with the ability to support our products and not rely on third party vendors for maintenance and support.
Another huge benefit is the cost savings. Since these products are built at cost by Help-U-Sell and our in house development team, we do not pay any hefty profits to development companies or third party service providers.
The savings in technology cost has allowed us to offer broker websites, email and MLS integration and data hosting free of charge to our brokers, making Help-U-Sell  the first company to provide all these services to our offices in house.
The broker websites also come with a powerful Content Management System (CMS) which allows you to add and edit pages to your website. You can also easily set all the meta data for each page. This puts the power of customizing and editing your website back in your hands. Our support team is also available to help with localizing your website.
MLS Integration
In 2010 we mapped data from 41 MLS boards covering about 85% of our offices. In October we started pulling additional data fields from the MLS boards which will be vital for our January 2011 project of upgrading our search pages.  New searches will include include additional filters such as school districts, neighborhoods and counties, property views and additional types to name a few.
Tech, Roundtable and Training Calls
Early in the year, we expanded our regular twice a week broker teleconferences to three:  Tech Tuesday, Roundtable Wednesday and Training Thursday.  Each session was well attended, but the strain on brokers trying to make the various meetings was intense.
We elected a few months ago to combine the Thursday call with the one running on Wednesday.  Wednesday’s call now might be a Roundtable call, Training or a National Sales Meeting. The two hour long meetings (Tuesday and Wednesday) remain one of the principal ways we use to communicate with our team members in the field.   Rallies
A full schedule of rallies took place through the Spring, Summer and Fall.  Groups of brokers came together for updates, camaraderie and brainstorming in locations across the country, from Baltimore to Oakland to Minneapolis.  More are planned for 2nd and 3rd quarter 2011 and you are urged to attend. The information shared at the Rallies and the quality of broker-to-broker interaction is not to be missed.
NAR
In November, Help-U-Sell returned to the National Association of REALTORS Expo and Convention in New Orleans. It was the first time in three years we exhibited and we did so to announce to the world that we are ready to start selling franchises and growing the brand again.  We were well received, with a number of attendees from around the world showing interest in Help-U-Sell.
Help-U-Sell Stimulus Program
Finally, we worked through 2010 with the help of the Help-U-Sell Stimulus package.  Royalties for the year were reduced from the current 6% rate down to 5% on transactions closing between Jan. 1 and Dec. 31 for those offices that “opted in” on the Royalty Modification Program amendment.
We are pleased to announce that, given the continuing uncertainty in the market, the program will be extended through Dec. 31, 2011.  That’s right:  Royalties will remain at 5% through NEXT December!
New Members
Though we weren’t actively selling franchises in 2010, we did add a few new members to the Help-U-Sell team.
Roy Perry came in to work Elko/Spring Hill, Nevada.  Roy is a 30 year veteran of the industry and is off to a great start.
David Reading recently converted his office in Ventura, CA, recognizing that a strong brand and consumer offering could help him grow as the market begins to turn.
Long time Help-U-Sell Franchisee, Tammy Whitehead, returned to the brand after a hiatus of several years.  Her office in Riverside, CA is doing remarkably well and she continues to be energized every day.

What’s coming in 2011

Franchise Sales
As mentioned earlier, 2011 will be a year of Franchise Sales and growth for Help-U-Sell.  Ron McCoy has created a plan to reach out to the Realtor community that includes email marketing, targeting and even some print advertising.  If you know of a broker in a neighboring town who might be an asset to the organization, please share that with Ron McCoy.  We want to be careful in our growth to bring in the best brokers possible and you are in the best position to know them.
University
As we gear up for Franchise Sales, we’ve put more energy and resources into completing the new Help-U-Sell University.  The new program will be administered online and will include content delivered via multimedia modules with coaching follow-up all the way.  University will also be activity driven so that the new member can complete the learning process with business already taking place.  Jeanne Strayer, whom many of you know is working with us to complete this big project.
Rallies
We will be announcing a Spring – Fall rally series in the first part of the year and will be giving you enough time to make plans and travel arrangements.  Even if you are a couple of hundred miles away, most areas have a regional airline that makes it affordable to go to the meeting early in the morning and return home in the evening.
Retreats
Finally, we’re planning a Broker Retreat for late Fall/early Winter.  Though it’s been a few years since we held such an event, they were always well worth the investment of time, energy and money in the past.  Help-U-Sell Brokers from around the country will come into a location for a couple of days of meetings and fellowship.  We will have details for you by the end of first quarter 2011.
Technology
• We will be adding a free virtual tour service in January that will be added to Listing module in the OMS.
• There will be a Seller back end and tools accessed via the brokers website.
• We will upgrade the Advance Search function on HelpUSell.com and all broker websites.
• A new Leads Management Module is scheduled for March 2011.
• The Drip Email Campaign module is due in June.
• The new Help-U-Sell University will be available online.
• We started with re-branding the OMS and it should be completed before the new year.
Industry Update
From an industry perspective, things appear to be slowly improving around the country.  Interest rates and prices seem to have hit rock bottom, making this an excellent time to buy and consumers seem to be getting that message.  Retail sales are up, the stock market is improving and real estate seems to be waking up.  Just as most of our offices did better in 2010 in 2009, we expect 2011 to be incrementally better as well.

News from the Short Sale Rumor Mill

Short Sales continue to be a huge part of our business, and while I hear little of the ‘I wouldn’t touch one with a ten foot pole’ attitude common a couple of years ago, they remain a challenge.  I consulted a team of experts about the current condition of this part of the business yesterday . . . ok:  I talked with Ken Kopcho and Maurine Grisso . . . and here’s what I learned:

Banks are getting easier to work with.  It’s as if they finally realized that, as remedies go, a foreclosure can cost them upward of $50,000 more to accomplish than a short sale.  It’s taken a long time, but they seem to be getting their processes organized so they can move more quickly in legitimate short sale situations.

Wachovia was the first to become more reasonable.  They have been easier to work with for months.  Recently Bank of America and Welles Fargo have followed suit.  Chase seems to remain ‘difficult,’ sometimes becoming non-communicative.

Bank of America’s Equator system – which was a bear when initially introduced – seems easier to navigate.  It is unclear whether this is the result of a system adjustment or the growing familiarity of broker-users.  (!)

While many short sale attempts don’t work out, there are things a broker can do to increase his or her conversion rates.

Spend time on legitimate short sale candidates only.  Remember:  being upside down by itself does not qualify a homeowner for a short sale; there has to be a real, legitimate hardship: loss of a job, medical expenses, lost income . . . something.

Don’t take short sale listings unless you think you can get it done.  Seems simple, I know, but Maurine – whose conversion rate on short sale listings is remarkable – says she walks away from almost as many as she takes.

Don’t forget about the non-short sale candidates who are still in trouble.  For example, Maurine is targeting homeowners who are 30-60-90 days late but who still have a little equity.  They may not be short sale candidates, but they probably do have a problem.  Plus:  they have some ‘skin in the game,’ something to lose if they don’t get the problem solved.  The broker becomes the solution.  (By the way:  if you don’t know how to find homeowners who are late on their mortgage payments, but who haven’t yet received a Notice of Default, ask me).

It’s January 2011, and real estate market indicators continue to improve slowly.  Pending home sales are rising — they’ve been doing so since October — and even new construction is showing a little life.  Meanwhile I hear that a lot of agents, faced with a fat Board Dues statement and nothing pending, are getting out of the biz.  That’s sad.  (But for the survivors, it’s good:  less competition.)  The sad part is: they’re probably getting out just when things are turning around.

This is a time to squeeze a little more, pay your Board Dues and get busy.  Hold open houses, find 4 or 5 legitimate new buyers to work with, get your blitz signs out and start reminding people you are here to help them save some money.  2011 will be a year of More.

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