by James Stefanile, ABR, GRI, SRES, QSC, gCertified, REALTOR/Salesperson, Berkshire Hathaway Home Services New Jersey Properties, Montclair Office
Of the many events in May, here’s one I hope you can attend. I will be hosting the event:
The guest speakers will be the head of the Montclair Section 8 office, a landlord/tenant attorney and a representative from a tenant screening company.
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by James Stefanile, ABR, GRI, SRES, QSC, gCertified, REALTOR/Salesperson, Berkshire Hathaway Home Services New Jersey Properties, Montclair Office
Let’s take a look back year over year to get a sense of how the housing market is progressing:
You will notice the number of closings has increased substantially in the last 5 years with only a couple of exceptions. This takes into account the market’s emergence from the recession and any improvement in consumers’ financial situation and confidence. In some towns where there has been a decrease in closings it may reflect a slower market (every town is different) but in most it reflects a lack of inventory from 2015 to 2016.
Even more obvious is the drop in total listings over the same time period caused by a lack of inventory. Whenever prices rise inventory falls.
As you see, prices have risen, on average, about 3% per year over the 5 year period. In some towns 2016 was not a great year. That was not a banner year anywhere. Montclair has enjoyed sustained appreciation and it was a good year there in 2016. North Caldwell, a luxury market, had great appreciation in 2016 but not so great for the 5 year period. Again, every town is a different market. However, all in all, prices are trending upward and at a normal rate. The boom years were anomalous and unhealthy with extreme appreciations leading to a major correction. Every 5-7 years the housing market corrects up or down. If we experience another downward correction (and I believe we have already or are in it now) it will not be as catastrophic as the one that accompanied the recession. Some analysts have predicted we may not even notice a small correction. I think we may have experienced that last year and was not widely reported.
The absorption rate is the amount of time it takes the local markets to exhaust the available inventory. Essex Fells and North Caldwell had particularly bad years in 2016. Their inventory shot up as did the time it would take to sell. This could simply be a function of increased inventory for that year or overly ambitious pricing. Those 2 towns have enjoyed a reduction in absorption rate over the 5 year period, as had the rest of the county. The improvement has been quite dramatic since 2012 for most of the towns with the exception of North Caldwell. Luxury properties sometimes take longer to sell. The reduction, overall, in the absorption rate reflects decreasing inventory which has been prevalent in present market conditions.
We have been out of the recession for more than 6 years. The predictions for recovery were that the housing market would rise again but at a normal pace and not the overheated pace pre-recession. Government controls resulting from the financial crisis, tightening credit standards and the slow improvement in consumer income have all played a part in this gradual but steady growth. The predictions for improvement in the recovery of the housing market have turned out to be accurate. We are seeing multiple offers in many markets resulting from the lack of inventory vs. increading demand. Some of the same rules that applied during the boom years can be applied now: a well presented property, correctly priced will do well in a shorter period of time. Even in the boom years if either of those conditions were not met a property would sit unsold. That is particularly true today. Conversly, buyers need to be motivated and disciplined in the face of likely competition. We have slowly moved back toward a seller’s market but sellers must be disciplined also as their prospects more gradually improve.
Filed under Market trends
by James Stefanile, ABR, GRI, SRES, QSC, gCertified, REALTOR/Salesperson, Berkshire Hathaway Home Services New Jersey Properties, Montclair Office
Here’s a radical new approach to housing prices and inventory. It’s from The New York Times Sunday Business section of February 12, 2017.
This is going to upset a lot of people, including real estate agents and home owners – that’s two-thirds of everyone who participates in residential real estate nationwide. I will repeat this many times in this post: THIS IS NOT MY IDEA AND I NEITHER ADVOCATE NOR DISPARAGE THIS THEORY. So, please, don’t send nasty mail directed at me. If you want to vent against the idea – be my guest, but remember: THIS IS NOT MY IDEA AND I NEITHER ADVOCATE NOR DISPARAGE THIS THEORY.
Well, now that we are clear that I am merely reporting this self-described “thought experiment”, here’s the link to Conor Dougherty’s article. The title is “Why Falling Home Prices Could Be A Good Thing”:
Have you calmed down yet? Before hurling invectives like “Socialist Blather!”, remember: THIS IS NOT MY IDEA AND I NEITHER ADVOCATE NOR DISPARAGE THIS THEORY. Then, why am I making it the subject of this blog? Because it’s interesting. It’s not something I want to happen to my industry from a purely selfish point of view but it’s a novel idea and I think it’s worth a perusal if not a conversation.
In short, the idea is that most houses build for about the same price, or close to it, in every part of the country. If Americans stopped thinking of their house as an investment and regarded their primary residence (or secondary properties) the same as cars, appliances, etc., then consumers might expect prices to go down instead of up. Then builders would ramp up production focusing more on design and technology than financing and politicians would be more inclined to find a way to keep prices stable, as they have tried to do with commodities like food and gasoline.
The other piece of the pie is government regulation, mostly on a local level. I have learned in seminar after seminar how local zoning and land use ordinances are keeping large segments of the population (especially the young) out of the housing market. With uniform construction costs and designs these rules might be re-visited and untangled to the benefit of the consumer.
Bear in mind we are not talking about luxury properties. The affluent will always go their separate way and the market psychology of that segment probably won’t allow for depreciation in values. For the rest of us mere mortals who are buying pretty ordinary homes (nice, but not extraordinary) the article in The Times lays out what the author foresees as multiple advantages for the consumer and the economy.
Simply put, the theory is that lower, uniform construction costs and expectations would increase supply and thereby keep prices modest. Most of the country would not experience severe deflation in housing, according to the author. The young would be the major beneficiaries of this approach, maybe not the older, longtime homeowner, but those older folks are already making an amazing profit on houses they bought way back when and are paid off.
Finally, the author makes the point that the disparity of wealth between segments of the population and between parts of the country has a great bearing on home values. He talks about housing that is “plentiful and cheap” as the greatest way to encourage mobility, upward economic movement in the population and as a way to even out the value disparity between cities and regions. The article does not predict that housing in extremely desirable areas will deflate. It will probably still be at a healthy price and housing values in more modest regions might still appreciate but more slowly, avoiding any more housing bubbles.
At the end of the article the author says the object of this “thought experiment” is not to embrace it head on but to draw attention to the obsessive attention to housing appreciation and the laws and ordinances that make housing less accessible to many people.
So, once again: THIS IS NOT MY IDEA AND I NEITHER ADVOCATE NOR DISPARAGE THIS THEORY. You’ve got to admit, however, it does stimulate thought and, maybe, conversation. That’s always a good thing.
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by James Stefanile, ABR, GRI, SRES, QSC, gCertified, REALTOR/Salesperson, Berkshire Hathaway Home Services New Jersey Properties, Montclair Office
Competition is back!
Several buyers of mine have confronted situations where the home they wished to purchase was on the wish list of at least one other buyer and, sometimes, more than one other.
I have a very simple strategy for dealing with this phenomenon: Go Big! Win! If you are convinced this is the home for you, if you have the means and the determination then don’t hold back. Do whatever you can to be the next owner of the property and let the other guy(s) go back to the drawing board.
Having the best money offer is the strongest way to achieve this, obviously, and herein lies the conundrum faced by some buyers: If you offer more you are spending more but if you don’t you will probably lose. Unfortunately, the strategy adopted by some buyers is to assume the other offers will not be up to the asking price. Of course, that depends on the property and its condition but, more often than not, any competing offers will be at asking price or better. Therefore, my advice is to start thinking of competing no less than the asking price and think beyond that. You can not assume that other buyers are holding back also. Your competitors are trying to win and you have to try harder in that situation.
The comparable properties that buyers rely on lose their significance in a competitive situation. The value has shifted from what was spent on other homes to what the buyers in this situation are willing to spend. A new comp is being created, born of this matchup.
A multiple offer situation is no place for baby steps, also. I’ve had buyers who said they’d go $500 over the asking price. Not competitive enough. I understand this is not my money and it’s easy for me to push for more of yours but I’m trying to educate my buyers to the hard reality of desirable properties: the object is to win. If you don’t want to compete that’s fine, we’ll go look for something else (something else that nobody else wants) and you can offer whatever you want as that seller’s only option. But, if you want to live in most of the area I serve you will find yourself up against other buyers trying to live here also and that necessitates a change of mind.
I’m sure someone reading this will think I’m trying to pad my commission by suggesting a higher offer. The amount I earn does not change much at all with the kinds of competitive bids we’re talking about. For me, it’s not about me earning more – it’s about you winning.
There is certainly a learning curve that every buyer experiences when in this process. Many times it’s a harsh curve where you find yourself sliding to defeat and buyers have to learn from that. I understand trying it your way once (and losing), but trying a failed strategy again makes no sense to me. You’ve all heard the old joke, “Doctor, it hurts when I do this…” to which the doctor replies, “Well, don’t do that.”
I can only assume that anyone who takes the time and effort to talk to a lender, meet with me, visit properties, cough up an earnest money check and digest the paperwork surrounding a purchase is serious. All of that effort is for naught without the competitive desire to win. In time you will not remember the extra effort you put into your offer but you will remember the home you wanted and didn’t get for a very long time.
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by James Stefanile, ABR, GRI, SRES, QSC, gCertified, REALTOR/Salesperson, Berkshire Hathaway Home Services New Jersey Properties, Montclair Office
In keeping with this blog’s tradition of something silly for the winter holidays, please enjoy this (I hope) amusing and slightly macabre video.
I wish you all a wonderful, happy, healthy, prosperous new year and more good news in 2017 than we had in 2016.
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by James Stefanile, ABR, GRI, SRES, QSC, gCertified, REALTOR/Salesperson, Berkshire Hathaway Home Services New Jersey Properties, Montclair Office
How do you say “thank you” to someone who brought you in to the business and weaned you from a know-nothing neophyte to a REALTOR who could make a living in real estate?
How do you thank a mentor and manager who put in countless hours explaining, not only the nuts and bolts of the business, but some of its more subtler nuances as well – a testament to her vast knowledge of this profession?
Judy Zinn
That was Judy Zinn who is retiring this year after more than 40 years as one of the grand dame of Essex County real estate. Her first business was Zinn Associates REALTORS, then she joined the Prudential Real Estate network which formed in the late 1980’s as Prudential Zinn REALTORS, and then, in an act of almost clairvoyant timing, sold her business to Prudential New Jersey Properties just as the Great Recession was bursting the bubble in 2007.
After that she stayed on as an agent and friendly advisor and then Prudential Real Estate became what it is today – Berkshire Hathaway Home Services New Jersey Properties – in a brand new, state of the art office, the only one on Bloomfield Avenue in Montclair. Our office has over forty agents currently and a leading market share as one of the top 5 brokerages, but my strongest memories are from Judy’s days as the leader of our little boutique brokerage in our funky little office on Church Street in Montclair. She was always genial, unflappable in the face of some very strong personalities and always had the answer to any situation. Furthermore, she always, always stressed honesty, fairness to all parties and good works. Her words still ring in my ears to this day.
Judy was a friend, as well. Her concern for all of us transcended real estate. She know when someone needed a break, was stressed, needed guidance for whatever reason. She involved herself in our families, was a great friend to my daughter and, throughout, had that rare ability to wield authority with a deft touch that was almost invisible.
In the midst of some brokerages which more resembled shark tanks she never allowed herself to be perverted by the mere pursuit of money and business. She was an excellent business woman and successful which makes her ethic all the more remarkable.
So, I won’t try to express some unique form of gratitude. I’ll simply say thank you, Judy, for your guidance, integrity, knowledge, good humor and friendship. Enjoy your well deserved retirement. The business will miss you – and so will I.
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by James Stefanile, ABR, GRI, SRES, QSC, gCertified, REALTOR/Salesperson, Berkshire Hathaway Home Services New Jersey Properties, Montclair Office
I published this article a few years ago but its relevance became apparent to me recently as I learned that the boomer generation was being eclipsed in size by the millennials. In other words, we’re not getting any younger and it’s more important than ever for us mature individuals to make future-looking choices. Real estate decisions are at the top of the list.
It’s still a great time to be a mature American. Senior generations control a sizeable portion of the wealth in the United States. There have never been more professionals who specialize in the issues of the mature citizen of the United States than there are today. From Seniors Real Estate Specialists® (SRES) like myself, to geriatric medical specialists, to elder law attorneys, to financial and estate planners, to tax specialists, there are many resources that seniors can turn to for help with their unique issues.
The most important thing senior citizens can do is establish a plan for their property and assets. It’s the best thing you can do for yourself and the people you love. As more and more of us live longer and more active lives, it’s an exciting time, but many of us have not planned for the economic issues these extra years create. To that end, seniors should find reputable professionals who specialize in financial and real estate issues at this very special point in life.
The most important thing to remember is: it’s your money, your property. You want to enjoy the fruits of a lifetime of work and you want to have the final say about how your wealth will be distributed to your heirs. With effective planning, assisted by professionals who specialize in your issues, you – not the courts, a squabbling family or the IRS – will determine the highest and best use of your property and assets now and in the future.
Regarding their real estate assets, mature customers want to know:
What is my home worth today?
After a visual analysis of a property, it’s relatively easy for a REALTOR® to compare it to recent sales in your area to determine the market value of a property. It’s important to remember, however, that the market does not understand the memories the house contains for you or the emotional attachment you may feel to your home. The other important thing to remember about value is that it’s not real until you decide to use it. Maybe you’d like to re-finance and draw some equity out of your home. Maybe you’d like to explore a reverse mortgage in order to provide additional income. If you choose this option, be sure to get all the information you can, especially with regard to your spouse or partner being on the reverse mortgage. Or, maybe you’ll join the market. If you do, your home is then worth only what a buyer is willing to offer and you are ready to accept – when your home is for sale.
When is the best time to sell my home?
Since the end of the recession house hunting has become seasonal again. In the peak of the housing boom any time of the year was the right time to sell. Now it may be useful to observe the traditional real estate seasons of New Years Day to Memorial Day and Labor Day to Thanksgiving Day. Interest rates are at historic lows and inventory is also low. Regardless of factors that may seem to be in the seller’s favor, it’s still important that your home be well priced and attractively presented.
How can I prepare my home for sale?
Here’s where the advice of a REALTOR® is particularly important, especially a REALTOR® with a Seniors Real Estate Specialist designation (SRES) . A good REALTOR® knows what buyers respond to and can help you “stage” your property for sale. You should keep in mind that the sales process is about making money, not saving money. Cut-rate solutions can often lead to discount results.
What are the financial considerations of selling my home?
There are many, obviously. It’s important that you are prepared, tax-wise, for the proceeds from your sale. Here’s where planning is important, again. A financial planner is a good idea, especially one with sensitivity to the issues of a mature customer. Secondly, may want to use some portion of the proceeds of your sale toward a new home. Another avenue to consider is called a 1031 exchange where taxes on gains are deferred by purchasing a “like” property within a certain period of time. It’s important to do this by the rules that the IRS lays down. There is plenty of information available on how to take advantage of this kind of transaction. Use this link to get more information on 1031 exchanges:
http://en.wikipedia.org/wiki/Internal_Revenue_Code_section_1031
What are my housing options?
Would you like to rent or will you purchase another property after you sell your current home? Are you thinking of purchasing a vacation home? Do you want something smaller? Bigger? Will your next home be in an “adult” community? Do you need some form of assisted living for yourself or someone in your family? Would you like to stay near your former home or is there another part of the country you’d like to explore? Your options depend on your needs and desires. You’ll be able to achieve those desires with proper planning.
What about my estate?
This is probably the most crucial part of the process – having the proceeds of your estate, whether real estate or liquid assets, performing as you wish, including distribution after your death or disability. Elder law attorneys are experts in estate planning, powers of attorney and other mechanisms that will insure your estate conforms to your wishes. This is a fast growing segment of the legal community and certainly an essential part of your planning.
Knowledge is power in real estate, like everything else. If you pick your support professionals carefully, you’ll be well on your way to enjoying the fruits of your labor.
Filed under Seniors, Uncategorized
by James Stefanile, ABR, GRI, SRES, QSC, gCertified, REALTOR/Salesperson, Berkshire Hathaway Home Services New Jersey Properties, Montclair Office
I’d like to think I’ve matured over the years. Every so often I re-read one of my blog posts from a few years ago to see if I still think they’re relevant. Most of the subject matter still is but what’s different is me. The tone and written attitude was different back then, maybe a little less mature. Things change with time and age and today’s post is an attempt to modify an attitude that seemed to run through some of my past postings.
I didn’t exactly complain when referring to my company but I did use some pretty snide language from time to time. I’ve never been dissatisfied where I work but sometimes I’ve let the devil get the best of me.
I’ve watched agents come and go. Many agents change brokers multiple times. I never have. My company has changed its name and office location but I’m still there and I have come to realize why.
My office is a very collegial, friendly place. The agents, for the most part, seem to genuinely like each other and there is no back-stabbing or client robbing that I am aware of. My manager works very hard at keeping the atmosphere light and has a kind word for everyone. My colleagues and my manager treat me with respect (for which I am very grateful) and I am more than happy to lend a hand if I have an insight that’s helpful.
It’s not my company’s job to take care of me (that was my parents’ job and not done well there). I may have confused my resentment in some of my past utterances and it’s dawned on me, over time, how well I have it here. This company has my back and they’ve proven it more than once lately (for which I am also grateful).
It’s a big company with more than 20 offices and the ownership team is accessible and gracious and consistently upgrading the tools we have to bring more success.
My management has stated that I am a loyal and valued asset to the company and, wonder of wonders, I believe them. I’m happy to be here.
Filed under Uncategorized
by James Stefanile, ABR, GRI, SRES, QSC, gCertified, REALTOR/Salesperson, Berkshire Hathaway Home Services New Jersey Properties, Montclair Office
The Housing Opportunity through Modernization Act of 2016, H.R. 3700 (click the link to read the bill – go on, it won’t kill you), passed the U.S. Senate by unanimous consent, and was signed into law by President Obama on July 29, 2016.
This is a significant piece of national legislation regarding the real estate industry, yet I never saw any mention of this in the media. Maybe it was back on page 27 in the paper or one of the teeny tiny links at the bottom of the online news. I think this is because H.R. 3700 is among those nitty-gritty, mind numbing issues we, the electorate, have no time nor tolerance for. Therefore, who better to talk about it but me for the next few paragraphs – lucky you!
HR 3700 previously passed unanimously in the U.S. House. This legislation:
For the longest time it was difficult to obtain a mortgage in order to purchase a condo if the development had less than a 50% owner-occupancy rate. No more than 50% of the condos could be occupied by tenants. These kinds of rules were specifically enforced for FHA loans which require less down payment and are government insured. Condo developments had to be certified by the FHA in order for lenders to provide funding. HR 3700 streamlines this process. The bill also requires FHA to replace existing policy on transfer fees with the less-restrictive model already in place at the Federal Housing Finance Agency.
This law, which, by the way, is one of the shortest pieces of legislation you’ll ever read – maybe that’s why it passed unanimously – also reforms other provisions in HUD that deal with mixed use properties, rural property lending and Public Housing Agencies rules for qualifying low-income tenant applicants. It also deals with the Department of Agriculture’s (USDA’s) single family housing guaranteed loan program. The modification of FHA rules in the law are probably the most recognizable aspects of the legislation but, as you can see, this effort reforms multiple government agencies related to real estate.
Read another summary of the bill at https://www.govtrack.us/congress/bills/114/hr3700/summary
H.R. 3700 was sponsored by Reps. Luetkemeyer (R-MO) and Cleaver (R-MO) and through companion legislation, Senators Menendez (D-NJ) and Scott (R-SC), so it was, kind of, a bi-partisan sponsorship effort. I don’t perceive any ideological slant to this effort. My guess is that all the legislators felt the crushing weight of the National Association of Realtors lobby. The NAR was a major proponent of this bill and mobilized its vast army of REALTORS to influence the Congress in addition to its professional lobbying efforts. I’m not criticizing the NAR. I believe this bill does a lot of good. I only point out the NAR’s influence as the largest trade organization in the country.
The Housing Opportunity through Modernization Act of 2016 is a good example of the day-to-day business of the country, not necessarily political, controversal or dramatic. This is the kind of issue you never hear the candidates talking about. They know our eyes will glaze over at the very mention of it. I believe, on the contrary, that we, the electorate, have to pay attention to legislation coming out of Congress and, especially, coming out of state legislatures which have an even more pervasive effect on all our lives.
During this presidential campaign we hear candidates promise many things but this is how it gets done, through these kind of bills that pass and are signed by the Executive branches nationally and in state governments. We also need to pay attention to who are legislators are and who is influencing them. Especially in the states, if the legislature is weighted heavily with one party and backed by a governor of the same party, all kinds of ideologically slanted laws can sneak by unobserved by the public and with little challenge.
Whenever I research a new law and get into its many aspects, it reminds me how the electoral process only skims the surface of what affects our lives, how we are told how great the future will be without being given any details of how that will happen. HR 3700 is an example of how it happens.
For anyone interested in public service at any level, even local, a nose for this kind of high detail, low drama process is absolutely necessary. The rest of us rely on these wonks to formulate our networks of law. In other words, we abrogate our responsibility to those who toil in legislatures, town councils, and executive mansions. Sure, there are activists who monitor this kind of stuff and, to my way of thinking, they have an agenda-driven reason for doing so. What I’m advocating is an un-biased observation of the machinery of our democracy. There is an emerging popular consensus that our country is run by the rich and fortunate few. In fact, our nation is nation of laws, founded and maintained on that priniple. Our national identity is not driven by religion, ethnicity, oligarchy nor fascist government. What comes out of legislatures in the form of law, supposedly reflecting the will of the people, runs our lives to a greater extent and if you think the game is rigged it’s because you’re not paying attention.
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by James Stefanile, ABR, GRI, SRES, QSC, gCertified, REALTOR/Salesperson, Berkshire Hathaway Home Services New Jersey Properties, Montclair Office
There is an online real estate firm (no, I’m not going to give you the name) that offers buyers and sellers limited services for discounted commissions but that’s not the most interesting thing about them.
Their agents are full time employees, paid a salary and benefits and they receive bonuses for transactions closed. Here, again, is the issue of realtors as independent contractors vs.employees. This firm gives its agents the leads instead of the agents going out and finding their own. Bonuses for closed transactions, on average, consist of about half of the agents’ take home pay.
My intention is not to defend the traditional independent contractor business model of most of my industry of which I am a participant. I closed my eyes and imagined working for a company that cushioned me by paying me a salary, benefits and giving me my leads. Seems perfect until you realize that employers have much more control over employees than contractors. If the company is giving the agents their leads, who determines which agents get what leads? Some leads don’t amount to much, in general. Can an agent be penalized for not producing on dead end leads? I cannot imagine that firm continuing to pay an agent who under-performs. An employee/agent can be fired for low production. In the film Glengarry Glen Ross a real estate company gives its salespersons their leads and the agents desperately try to turn bad leads into sales or risk being fired. The employees resort to stealing good leads that are locked away. There are accusations of favoritism and vendetta against certain agents as the company controls the flow of leads and business. The film depicts an angry, sullen, desperately sad atmosphere where average people are ground down until they are forced to behave recklessly. Maybe it’s an extremely dramatized example but one that could very easily happen.
Any firm who hires full time agents as employees can also dictate the agent’s working hours and conditions and can mandate certain kinds of training. The agents I read about who work for this online company said they felt more secure but that sense of security comes at the expense of the agent’s autonomy. If they are good producers I’m sure they’re secure but if you’re a middle of the road or casual producer you’ll be looking over your shoulder.
That online company is funded by venture capital and had to overcome extreme skepticism on the part of many investors who didn’t think it was a viable model. In fact, it almost went under during the recession and now only enjoys the tiniest fraction of the marketplace.
The problem I’ve always had with limited service models like this one is – why bother? Would you hire a plumber to come to your house, give you the necessary parts and then leaves without servicing your problem but still charges you a fee for parts and labor? If you’re spending money on a service you should get whatever you need to succeed. Imagine going to a restaurant, giving the waiter your order then being told you have to cook it yourself and still pay for it.
Furthermore, this kind of real estate model suggests you can do it yourself, that there’s no big deal in pulling off one of the biggest financial transactions of your life – buying and selling property. It implies that anyone can do it without much experience and just a limited amount of guidance and support. Nothing could be further from the truth, in my opinion. Being a realtor requires highly honed skills, an almost future-predicting ability and a sixth sense for trouble. This limited service model is an outgrowth of the so-called “gig economy” or “shared economy” where everyone can do anything (drive a cab, be a landlord, be a content provider or a video producer). I regard it as the dumbing down of every discipline. No one is a full time professional and everyone is a talented amateur who can do any job in their spare time.
Call me old fashioned but I spent my life trying to get good at whatever was paying my bills and I found that to be a full time job. When I was writing and producing for television it was assumed that if you were a content provider you had some specific, tested and developed skills and talent for that endeavor. Content providers on social media and in the gig economy have no such requirement. In fact, in my world you were paid in exact relation to your talent and ability. Gig-ers expect to get paid by simply showing up and saying they’re qualified for whatever it is.
But, I digress. Back to real estate business models. I would find it very demoralizing if my real estate employer had that much employee-related control over me. I don’t expect to be dependent on my company for success and I don’t want them to interfere with it, either. I take my own set of values to every job and they’re my values and not written in the company handbook. My company sets me free to succeed on my own within ethical and legal bounds and allows me to proceed, as long as I don’t violate the law, without the threat of any company sanction hanging over my head.
If I wanted a full time job with a salary and benefits it certainly wouldn’t be a sales job like real estate. I believe the salary model best applies to workers who produce something tangible or do office work and applies less to the service economy. Every morning I am unemployed until I make opportunities for myself. I can think of no greater motivator.
Again, I’m not here to hawk the full service model. I think the logic of it sells itself and it should be obvious that you get what you pay for. A full service model requires a full service agent, a realtor who runs his or her own business and makes their own opportunities. I’m sure that agents who are full time employees are honest, hardworking folks but they are also smothered by, dependent on and beholding to the company they work for. That’s a lot of baggage to bring to a transaction. Combine that with limited assistance to the customer and you have what I regard as a bad deal.
When past transactions have concluded I have been thanked by my clients for my calming influence and for my expertise. Those are qualities I developed myself. I had them when I joined this company and I didn’t rely on the company for those abilities. I’m no different from any full time, full service realtor I know. Berkshire Hathaway supports me in a big way but doesn’t control me the way an employee is handled. I am free to develop my own business and run it like a professional, not just an employee. Also, I am not a part time, talented amateur. This is not a gig and it’s not just a job. What I do is much more personal than that and, as such, I will do everything I can to perfect my abilities and protect my clients – and not in a limited way.
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A Real Estate Blog by Jim Stefanile 