Wednesday links 05-21-2008

I posted this long comment on Redfin, but it is still awaiting moderation. (Feel free to delete this once it goes up over there)
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Hey Glenn, thanks for your invite to post my reply. But it might end up being longer than your post!

This is a good list. I didn’t find any Redfin biases, except maybe a tad for #14, but it’s acceptable.

I’d like to give my few cents and add some questions.

First of all, I’d split it up for Listings and for Buyers.

For Listings, add these:
1) Will you take the maximum photos allowed by the MLS? Will you take it with a super wide angle camera, or hire a professional photographer?

Subtext: Buyers want photos, and it better be up the FIRST day of the listing when the alerts go out! Yes even for a 1 bedroom, a good agent should take 30 photos. In our area adding 30 photos is free, yet less than 10% of agents do this (ie LAZY). And a bonus if the 1st image is a collage since some sites only carry the 1st photo. Our company policy is 30 Super-Wide Angle photos for each listing. If the answer is “yes” say “show me.” One thing is to promise it after the fact, another is to be doing it as a default. If they can’t do at least that, what else are they going to cut short?
(Redfin does a great job with this!)

2) Do you work with stagers that you can recommend?

Subtext: Staging is the key in this marketplace. Only 1 in 100 homes are staged. Think of it as buyer manipulation. Make them fall in love with the house. That “gut feeling” that they get, that isn’t by accident. Just sold 2 places in 4 days. (blog post soon) and the agent feedback was that it was “overpriced.”

3) Show me your last 5 deals. Did they all sell? For how much under/over list? Today you recommend that I sell for XYZ, so show me how far off list price were you in those deals?

Subtext: There is something called “Buying a Listing,” when a listing agent gives you an artificially high price just to get the deal. See: http://tinyurl.com/6njuy9 Our policy is NOT to recommend a list price, but many agents still do.
Look at their track record. Do NOT pick an agent based on “Well I can get you X.”

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On the buying side, ask:

1) How do you/we come up with pricing?

Subtext: Do you recommend a price, or do I?
Some companies (I think Redfin) asks the customer to submit the price and explain why. Will the buyer agent do a background check (Frankly CRA tm) on the Listing Agent to see their last 10 deals, so you can get inside the mind of the listing agent? What % below list did they take last week?

Do you use a “Vegas Odds” system of showing 4 pricing options and allow the customer to decide how aggressive they want to be (sometimes low starting prices end with a higher contract price)

2) Will you take a Buyer Agent Photo Album (google it) of each property that we view and post it online privately for me to view later?

Subtext: This process helps the buyer (and agent) save hours from having to visit the property again and again. I can shoot 100 photos of a place in 7 minutes.

3) Will you accept inflated buyer agent offerings (bribes)?

Subtext: Some places will offer a $5k or $10k bonus, or even a trip to Tahiti, to buyer agents. We feel this money is really the buyers, so they get it back at closing. Can’t bribe us. (I believe Redfin keeps bonuses, read the fine print, I could be wrong.)

#10 is great, add to it: What happens if I find a place on my own? Do I still have to use you?

Subtext: My answer= Yes, you have to use me. Some agents (weekend warriors) will let you do your own thing, but some will require an Exclusive Buyer Agency Agreement. I don’t have time to compete against my client. We are a team, both looking for the perfect home. But don’t necessarily be scared by these, they can actually HELP the buyers. http://tinyurl.com/28nn8f

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For both sides I’d ask:

X) Give me a recent example where you fought for your client to get them another $10,000.

X) Do you have any affiliated business arrangements that either you or your brokerage get compensation for? If so, exactly how much.

Subtext: That “great” lender or closing company that they recommend, are they getting $1,000 from it? Watch out for the “I don’t but my broker does.” As their wallet grows with Best Buy gift cards for being a Top Office Referrer.

X) How do you use technology in your business.
Do you text? Do you IM? Twitter? Do you offer digital signatures for contracts so we don’t have to waste hours on paperwork and trips to Kinkos? Can you ratify a contract via Text Messaging from the sidelines of a professional soccer match (true story).

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In response to your 15:

#14 is a little Redfin specific (since their business model pays their agents based on service), but a valid question.

#12. Give them some keywords: Dual Agency and Dual Representation, so they can Google it for more info. Also make it a tad more clear:
Do you act in a Dual Agency capacity where you would be representing us at the same time as you represent a client on the other side?
Remove the “No Agent can fairly” with “It is our opinion that…” I forbid Dual Agency, but an agent in Horse Country Virginia made for a good reason for it.

I’d watch out for #2. While you don’t want a Weekend warrior with #1, you also don’t want somebody that does a zillion deals and uses the “throw a bunch of ’stuff’ against a wall”- technique to see what sticks. Yeah some might stick, bit it is still “stuff.” So make sure they are full time, but I wouldn’t care much about 10 vs 40 deals. You might get better 1 on 1 time and service with a 10 vs working with the assistants on a “40 deal” agent. Quantity vs Quality.

Also don’t fall for the “Top 5% Producer” garbage. It is really easy to manipulate the numbers. Heck, I was the #1 Agent in the US 30 and Under… in my first year with $75 Million in sales… Oh did I tell you I started off doing $100 listings? I also like to say “I used to rebate, but then I got good.”

I really like #7. (small typo though)

Thanks for the dialogue. When I have a college buddy that lives in another state, and he wants me to find him an agent, these are the types of questions I ask. I also look on ActiveRain since it breaks agent bloggers down by city. Don’t just pick the #1 agent as they might just put up garbage to be ranked first.

Frank Borges LL0SA
Broker FranklyRealty.com
Blog.FranklyRealty.com