Real Estate Commissions – You Charge HOW MUCH?

Real Estate Commissions – You Charge HOW MUCH?

  I often hear from consumers that they feel real estate commission are too high. I often hear from real estate agents that real estate commissions are too low. I guess it depends on what side you’re on!  I also train a lot of agents. In doing so, I am always struck by the same sentiment from all of them. “Wow, there is a lot more to this than I thought.” Yep, there sure is. I once had a client get his real estate license in hopes to save money since he bought multiple properties each year. He very quickly realized that not only was the time invested not worth the money saved, but that he really wasn’t saving anything after all the fees and taxes were paid. As Realtors, we own our own business which comes with several perks. It also comes with a lot of liability and a lot of expenses. There are tools we need to do a great job for our clients. We need equipment, so we can keep up with technology to service our clients. We are required to take continuing education that is a benefit to clients. We pay self-employment taxes. If we have any help with paperwork, such as an office assistant or a contract to close professional, we pay for that. Most hire professionals to do things like take photographs, videos and measure houses. That all comes out of our pocket. We have errors and omissions insurance and license fees. Marketing and advertising and gas to and from properties. We also pay our companies for the benefit of the experience and advice the Brokers give us and those are just hard costs. We’ve all heard the expression, “time is money.” Why are so many people so opposed to paying others for their time? Just like those new agents discover, there is a lot of time spent during the buying and selling process that most clients never see. Phone conversations with clients and agents, emails, text messages, drive time to appointments, scheduling and rescheduling showing appointments, inspections, appraisals, reviewing offers, drafting offers, negotiating, late nights and early mornings, coordinating closings with title companies to make sure that all the client needs to do is show up! Those are just a sample of things that Realtors spend their time doing behind the scenes, so their client doesn’t have to worry about anything but the move. Yes, time is money. Most of us think nothing of spending hundreds of dollars to go see our favorite entertainer or sports team but we balk at paying a professional Realtor handle the details of, quite possibly, the biggest investment we will make in our life. Before I...

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Nashville Investment Property

Nashville Investment Property

  Nashville is the “It” city. It has been ranked the #1 housing market in the nation. Depending on the day, we hear that 80-100 people move to Nashville every day. We were named the #1 Minor League Baseball city. We are in the Top 20 cities for tech jobs, #6 for young professionals and #7 for millennials. We are among the Top 10 cities in which to launch a career and Nashville has the third fastest growing large Metro economy. The list goes on and on. But, with all these accolades, does that mean that Nashville is a great place to buy investment property? Yes and no. With Nashville’s influx of residents, we have also had low inventory. Because a lot of those are millennials and young professionals, the demand for properties under $200,000 has increased significantly. Typically, this is where investors like to buy. They can get in a property for a decent price, rent it out for an attractive price, and still get a nice return on their investment every month. We were getting multiple calls a week for a while from people all across the country that wanted to invest in Nashville. Most used the word that investors dream about, “deal.” “I want to get a deal.” “I’m looking for a deal.” “Where can I find a deal?” and “If you find a deal, I’ll buy it.” Well, the truth of the matter is, there really aren’t many, if any, “deals” in Nashville right now. First time home buyers, young professionals, millennials and investors are all competing over the same property. Investors that have cash may be more attractive to sellers, however, cash is not always king and not all investors have cash. Some sellers don’t want to sell to an investor and will take an offer from an owner-occupant over an investor because they either want to help the “little man” or they don’t like the thought of renters living in the home they have loved for years. Another pitfall of investors is thinking that cash is king – no matter the offer. Sellers won’t necessarily take thousands less for their home just to have it close in two weeks. Some would rather wait another 2- 3 weeks and make more in the long run. If you plan on investing but you are getting a loan, you are in the same boat, for the most part, that owner-occupants are in and you will find the Nashville market a tough one to compete in. The best thing to do is to find the properties before they go on the market or at very least, the same day. Find a Realtor that diligently hunts for properties...

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What is a real estate closing?

What is a real estate closing?

  Ok, you have signed the Purchase & Sale Agreement, all contingencies are satisfied and now it’s time for closing. But what is a real estate closing? Well, your real estate market may do it differently, but I will give you an idea of how most closings happen in the Greater Nashville area. A title company gets all the contract documents from the two parties. If you are using a Realtor, they will handle this for you. The title company works behind the scenes to handle all of the legal work, but, in a nutshell, they make sure all the liens are paid off and that the contract is followed as it is written. In our area, it is very common for the Buyer and Seller to have different title companies and they perform their “closing” at different offices, at different times. A lot of clients will ask me if the buyer or seller will be in the same room. Most of the time, the parties never even meet. The Buyer is entitled to do a final walk-through of the property before closing. This is done to check for any repairs that were to be done and to make sure there has been no damage to the property. Basically, the house needs to be in as good or better shape than when the contract was signed. Typically, the final walk-through is done 1-2 days prior to closing. In a perfect world, the Seller would have everything out of the property so the Buyer can see everything. The world is not always perfect, however. A lot of times, the Seller will still be packing up to move when the Buyer walks through. This can cause stress for both the Seller and the Buyer. The Seller feels the pressure of getting everything out of the house and the Buyer feels anxiety about the Seller having everything out of the house and it being ready for them to move in. Unfortunately, I have had one too many experiences where the moving out doesn’t go quite as planned. I say this as a caution, because if at all possible, it is always best to have everything out of the house the day before closing. Moves almost always take longer than anticipated. The movers were supposed to send four men and two trucks and someone doesn’t show up for work and a truck breaks down. Yep, this stuff happens. I have seen people moving out until midnight, people having to get hotel rooms at the last minute, pay for extra storage days, have to do repairs at the 11th hour, and experienced the myriad of emotions that go along with all of those issues. The actual closing...

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My House Won’t Sell!

My House Won’t Sell!

  Our market here in Nashville has slowed since Spring/Summer. That has resulted in a lot of frustrated Sellers. They may have put their house on the market at the end or just after the frenzy and now they are waiting, and some not so patiently. “My house won’t sell!” And everyone told them how quickly it would sell. “Your house is great. It will sell in a day.” “My friend had 13 offers on their house the first weekend, you won’t have any problem at all.” There are two problems with that: 1. They aren’t Realtors that are in the market every day, and 2. They are listening to old news. First of all, you have to make sure you have done everything to present your house in the best way possible. Before photos were taken did you make sure the interior and exterior were spruced up, neat and clean? Have you taken extra items off counter tops? If you present your home hastily and it doesn’t look its best, it could hurt. Did you have professional photos and/or video taken? Nothing screams “unprofessional” like seeing someone standing in a mirror with their phone in their hand in a real estate photo. Make sure money is spent to do it right the first time. Are you receiving requests for showings? If you are, you have done at least a good enough job with the photos and marketing to get people interested to come see your house. Are you accommodating those requests, even when it’s not convenient. If your house isn’t selling and you frequently decline showing requests, you are part of the problem. You knew when you decided to sell that people needed to see it in order to buy it. The more restrictions you put on potential buyers seeing it, the more likely they are going to buy something else before they get a chance to see yours and the less likely you are to sell at all. Are you keeping the house neat and clean at all times in case someone wants to see it at the last minute? People open closets, so don’t forget those and throw everything in one as you’re running out the door. Also, smells are a big turnoff to people. Too many candles, strong food odors, pets, flowers, smoke, even air fresheners can make some people head out the door. Allergies and sensitive noses can cause some buyers to decide against your house because they think there is no way they can get “that smell” out. If you feel you have presented it well and you are getting people in to see it and the feedback is positive, you probably have...

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Realtors, What to Look for in a Brokerage

Realtors, What to Look for in a Brokerage

  Realtors today have a multitude of choices when it comes to brokerages. Where should I hang my license? What is the difference between companies? What does the company provide? And the biggie: What is the commission split? These are all great questions and considerations when choosing a brokerage. Here are some tips on what to look for in a brokerage. How long have you been an ACTIVE Realtor? If you have been actively selling real estate for more than 3 years, chances are you don’t need a Broker to hold your hand through each transaction. You may consider a Broker based on their presence in the community or commission split. If you are a brand new Realtor or don’t have much experience with complex real estate transactions, you will want to find a Broker that is more hands on or a company that has extensive, ongoing training and/or mentor program. Do you sell luxury homes exclusively? If you sell mostly high end, luxury homes, you may want to consider a brokerage that has the reputation for catering to the luxury clientele. A name can often times be perceived with high end and if that is the market you are going for, that may be a good fit for you. I will caution you that if you sell or want to sell other types of property as well, the burden is on you to make sure your sphere of influence and referral sources know that you aren’t ONLY looking for luxury clients. If you do not educate people on what you are looking for, that luxury name brand may come back to bite you if/when that market slows down. Do you want/need an individual office? A lot of newer brokerages are going to an open concept/café style environment. So many Realtors work from home or meet clients at coffee shops these days. Most do not need or want the extra expense of renting an office in the brokerage. However, there are others who have a team of people they would like to work all in one location or those that prefer to work out of an office. This should be a consideration when choosing a brokerage. You will also want to find out if they charge extra for those private offices. If they don’t, you may be paying for space even if you don’t use them. Do you need Marketing or Administrative help? A lot of Realtors do it all on their own. Some outsource what they don’t want or can’t do on their own. Still others prefer to have an individual onsite that they can get help from on a regular basis. There are a lot of solutions...

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