I am not a philosopher..

The title of this article says it all, but I do have some observations I'd like to share.

This year has been a year of learning in this profession unlike any other. I haven't been to one continuing education course nor am I a part of any designation program among the many in real estate related educational opportunities. It's this blog thingy though that has opened my eyes. No, not my blog, but the many others that you will find in the blogrolls on the right.

The issue is the future of our business. I don't have my arms completely all of the issues that face the real estate industry at this very moment, but the picture is starting to clear.

Currently I am serving as an interim Director on the WARDEX Board of Directors. WARDEX is a new organization being created by the three local Realtor Assocaitions in Mohave County. WARDEX will serve as the MLS (although we are calling it a Data Exchange now) for the members of the three Assocaitions. I have an active hand in creating the bylaws, the rules and regulations, and the policies of WARDEX.

One issue that we are debating is the data in the MLS, as in what to do with it. Protect it from outside Internet forces who 'scrape' such sites to provide content for themselves?? Protect it so that the brokers can manage the data as they see fit?? Protect it from outside Realtor members who are not part of the regional area?? Decide not to share the data with Internet start ups that will come back to Members to sell them advertising?? These are some of the things I'm hearing that we should consider. Protect, protect, protect. Protect everyone it seems other than the seller in my opinion.

When are we going to realize and admit that there are millions of human beings that use the Internet with the intent to make some kind of purchase??

I am one of those humans that uses the Internet to make a purchase. I play hockey and have done so for many years now. I play in an adult roller hockey league in Lake Havasu in the cooler months of the year (can't even consider ice hockey 'round here because the average temp in Havasu is HOT, ice doesn't do well where it is HOT). A couple of years ago it was time for me to replace some of my gear (equipment). I play goaltender and it's important to have protection from the puck and the errant swinging sticks. I've been gaining weight around the midsection in a typical fashion and some of the gear that I was using just didn't get the job done any longer.

There are no hockey pro shops in this area and it's unlikely that I have time to head down to Phoenix or Las Vegas to shop at the limited places that may carry the kind of equipment I need. So I did the next best thing. I used the Internet. I shopped at hockeygiant.com. They have a great selection of gear but the problem was the information was pretty limited on how the stuff fits, how good of quality it is, that kind of stuff. I couldn't even log on to say a manufacturer site for better information and I simply wasn't plucking down $500 or more for goalie pads without more information.

My next stop was ebay. Why?? Immediate dialog with the seller was at my grasp, it's what me as the consumer wanted. Yes, some stuff was used and not in 'brand new condition' but at least I was speaking to someone (through the computer) who could give me more information before I made an offer. Hockey equipment for goaltenders is hard to find anywhere, believe me it is -- maybe not so hard in Canada. I bought most of my new gear from sellers on ebay, not all, but most and mostly for the reasons I just stated.

Now to bring this back to real estate. I think if us members are hellbent on 'protecting' the MLS, we will be nothing more than a retailer like hockeygiant.com, which is a fine service I should say but sometimes isn't enough for me as a consumer. MLS is still a fine service as well but is it everything that the consumer wants?? If it is not, then the consumer will find another outlet, like I did with ebay.

I've recently started to put my listings on Internet sites like Google Base, Trulia.com, etc., these are other outlets that consumers can find information about property for sale and I'm getting response from potential buyers. I bet my selling clients like that. Clients like results, they're funny that way. Heck I bet I'm not even getting response from other potential buyers who may already have a Realtor picked out and working with. Buyers are doing much more legwork these days. They are spending their time looking for properties on the Internet they may be interested in. They may or may not hire an agent to help them in the efforts to purchase a home.

Of course these buyers could stumble upon my website that has a local IDX feed (a search engine for property in my MLS) and shop for a home. However my site doesn't quite compete with the Googles of the Internet. It's way more likely that a potential buyer will find information about a property I have listed on Google Base than on my own website.

What do my selling clients hire me to do for them?? Protect the data from those on the Internet who 'scrape' data for their own use?? Nope. Protect the data for the broker to use as they see fit?? Only if it can be proven that this practice sells property. Protect the data from Realtors outside the area?? No. To worry whether or not an Internet search provider will sell advertising to Realtors?? Not on the client radar I'd say.

My gut feeling says that there should be as many REALTOR.com search sites as needed. And the MLS data should appear on sites like that at will. Oh a limited amount of relavant data and nothing that would be considered confidential information of course, but the key is to get the listing to appear where the buyers are looking. I'd say that is a specialty that Realtors aren't very special at doing. Google is though, and Google probably becomes the defacto initial search online for potential buyers in a short amount of time.

As a leader at the Association level I'd like to at the very least be in a position to partner with search sites and grant them access in a limited fashion of the data found in the local MLS. That way the Members are again on an equal playing field and their clients would ultimately benefit. And after all without the client there is no need for the service I provide.

Really sellers, I'm NOT picking on you...

Here's a recent letter to the editor of our local newspaper.

Sellers, you are not alone...

Even the President of the National Association of Realtors is having some difficulty selling his home. It's been on the market for over a year.

Hat tip to John Wake for this article.

'Matrix' goes to Supervisors...

I wasn't able to attend yesterday's P&Z meeting. The following is an email that was sent to me that covers what happened..

Today the Mohave County Planning & Zoning Commission met for its regular monthly meeting. Item 44 on the agenda was "Discusion and possible action RE: Consideration of a policy regarding standards of evaluation for proposed minor land division applications, in the unincorporated areas of Mohave County, Arizona."

This was essentially the last item on today's agenda. The meeting opened, though, at 10 am this morning with a call from the Commission Chairman, Earl Hamlyn, to move this item to the top of the agenda. Other Commissioners disagreed with shuffling the agenda, indicating that many people who intend to speak either in favor or opposition to the Matrix were probably not yet in the audience, as they would have known that it was almost last on the agenda. It was agreed that those in the audience wishing to speak on the issue could speak either in the morning or later when item 44 was again before the Commissioners, in the original agenda order.

Item 44 finally came up at around 5:15 pm. Many in the audience had left for good and there were approximately 15 speakers on this item. Those who spoke on the issue were predominently against the Matrix. I believe 10 speakers opposed, 3 had concerns about specific components of the matrix and 2 were in favor of it.

The Matrix has been altered since last week's Matrix "workshop".

The Planning & Zoning Commissioners removed all infrastructure and service requirements from lot splits which create parcels that are 5 acres or greater, with the exception of maintained, 2 wheel-drive passable roads. Two Commissioners indicated that they would want to see proof of maintenance agreements and/or receipts, paid invoices, etc. for roads that are privately maintained, though.

Parcels less than 5 acres must be in a fire district or have an agreement for fire protection service acceptable to the Commission.

Parcels less than 2 acres must also have a connection to water service acceptable to the Commission or be on a shared well arrangement acceptable to the County.

Parcels less than 2 acres must also be within 1/2 mile of a paved road.

Parcels 1 acre or less must be on a paved or surface-treated, dust-controlled roadway.

Parcels 1 acre or less must have direct access to a public sewer or a denitrifying alternate septic system.

I believe a copy of the new Matrix is available at the Mohave County Planning & Zoning Department's web site.

The Planning & Zoning Commissioners voted 6-2 in favor of recommending this matrix as a guideline for adoption by the Board of Supervisors at their October 2, 2006, meeting. (Commissioners Joe Bibich and Bill Abbott voted against recommending the matrix to the Board of Supervisors.)

The Board of Supervisors must now be targeted with constituent opposition to the proposed matrix.

By the way, today the Commissioners used the new Matrix as the criteria for evaluating this month's requests for rezone applications for minor land divisions. The Commissioners claim that consistency is a goal of the Matrix. They have yet to demonstrate any consistency in their recommendations for rezone requests for minor land divisions since first using matrix criteria at their April, 2006, meeting.

I want to thank Kent Luken for the update. Sorry you had to be there the entire day, I had no idea it would take so long.

Time to get serious now, time to go to the County Supervisors and let them know how we feel about this. Hopefully the elected members will listen to the public, something this Commission has simply refused to do -- save for two members.

Real estate anecdote..

I hold the first part of the Membership orientation course for our Association and am looking for some great short stories or anecdotes that I can share with the attendees. If you know of any please share them with me. My stuff is getting old.

Thanks.

County P&Z today...

Okay well I covered this fairly well, today at the meeting the commission will totally ignore the public outcry about their proposed 'Matrix' and submit whatever new 'Matrix' they come up with to the County Board of Supervisors for the October 2nd meeting.

You know what?? Go down there today and give them hell anyway, just for the fun of it. The commission is not an elected body yet they are acting like they do not have to answer to anyone. I will temper my thoughts a bit because I know of at least a couple panel members who have listened to the public on this and want to submit no 'Matrix' to the Supervisors. To those members of the commission I say thank you.

I love politics and I loathe politics.

Attention KGVAR Members...

This is a reminder that I, as your fearless leader, have led a key change to our Association bylaws that you all approved for the upcoming elections. That's right no more excuses that it was too difficult to get on the ballot for a seat on the Board of Directors, all you have to do is head to the Board Office and petition yourself.

Right now Rita Zumwalt, next years president, is working with the nominating committee to fill out the ballot for the election in October. What?? She hasn't called you?? You want to be on the Board of Directors?? Well then it's time to head down to the office and make your intentions known.

Don't forget you can also call Rita to request to be a committee chair for next year as well. This year has seen some relative success with committe involvement but much more is needed. We are not a small organization any longer and we will continue to grow. The Board of Directors is no longer a catch all for all of the business for our Association. Input from all walks of the Members is more than needed.

Members, times are changing... and quickly. Changes will affect our Associaton and it's so apparent that your contribution is vital. Are you up to the challenge that lies ahead?? I hope so. Many members of the current Board have given up precious hours of our business and lives to make a difference and the experience is rewarding.. yet also tiring. I look forward to be the immediate past president next year but I assure you that I'm not going away quietly.

Many challenges will face not only our business, but our clients as well in the coming term. We are standing up to the County and City on important issues surrounding growth and private property rights. I notice many more Members every day that will be great leaders of our Association that will hold our convictions true going forward. The key for us is your willingness to be involved.

Do tell your brokers that their input on the new WARDEX data exchange organization is needed, now is the time for them to step up and organize themselves to be on the same page to help counsel the Board of Directors of the Association. Feel free to crash any committee meeting that you think you can help with, you'd be surprised how much a few hours volunteering your time can make a difference in the Association and the community.

We are in good hands with the current Board of Directors but terms are expiring, you be the difference in enhancing the direction of this emerging Association. You are invited, you have been asked, you can make the difference.

This Association is only as good as the Members make it to be.

August sales report (2006)

It's that time again, time for the sales report from last month. As always I take the data straight from the local MLS, that I am a paying member of, and the data may not always be accurate. I sift through the data and exclude information I deem to be incorrect that could corrupt the findings. Data shown is for Single Family Homes within the City limits of Kingman and includes the North Kingman, Valle Vista subdivision, and units in the Hualapai Mountains area outside of the City limits but are areas where many SFR's are located. See here for an example of the areas researched for this report.


Well, not a total bounceback month but it is nice to see more activity from the previous month. Hopefully this is a new trend in the making. As you can see the total listing activity dipped a little in August while the sales perked back up to the level seen in June. I noticed the phone ringing and other such activity in August and it has continued through the first week in September.



The average sale price dipped again towards the number reported in May of this year. This is a hopeful sign that those sellers who really need to sell and move on to another home in the area or just out of the area all together are making significant deal in order to do so. I was hoping to see the average list price come down as well, but I alluded to why it may not have in the listings report I shared on the first of this month.

In August the average home sold was a 1,534 square foot home built in 1995 with 3.07 bedrooms, 2.09 bathrooms, a 1.87 car garage that reduced its initial offering price 8.7% (one unit actually reduced it's price $109,900 to have a final sales price of $115,000... kinda makes my eyebrow raise a bit. Still even without that sale factored in the average price reduction is 8%).

Of the 70 homes that closed escrow 24 were new construction (down from 27) and 46 were existing homes (up from 38). New construction sale price increased 4.3% from the previous month while existing home prices fell 7.8%.














The charts above look back and compare this years data to the 2004 and 2005 years. Please click on any of the charts for a larger view.

I think that we will continue to see the sale price fall in the coming months as motivated sellers quickly distance themselves from the not as motivated seller. That is good news for any buyer that is looking to get into the local market because there should be plenty of choices to consider. It may still be some months before the investor type of buyer is interested in buying in the local market. I still see many units for rent in my resources and rents are nudging lower if anything right now.

If you would like further clarification on this report please leave a comment here, email me, or contact me by phone. I'll be happy to talk to you. Look for more reports in the weeks and months ahead.

I Remember...

There was one summer in particular in my childhood years I will never forget. I spent the summer of 1986 in Morristown New Jersey with my Uncle Lenny (Lenny is actually my Dad's cousin but I always knew of him as an uncle). Uncle Lenny was planning to move from New Jersey to the northern Nevada area where my family was living, so my folks sent me back east with him to spend some time there and to help him move.

All the family stuff aside, this was the summer of New York City for me. I was 15 years old that year. It was the year that the Statue of Liberty turned 100 years old. My uncle took me to NYC about five times while I was back east. He took me to the neighborhood that he and my Dad grew up in Brooklyn. I ate at Peter Lugers. I shopped at Macy's (it was much larger than the Macy's in Reno). I couldn't believe how nice the NY Public Library was, how big, the woodwork throughout the place, that kind of stuff. Unlce Lenny thought it would be funny to ditch me in Little Italy to see if I would freak out. I didn't, I loved it there. Had a slice of pizza and was making friends when he reappeared.

But what topped it all off for me was having a late lunch at the Windows of the World restaurant atop the World Trade Center. I think the Chrysler Building is the finest looking tower, I think the Empire State Building is the most fascinating tower, but the Twin Towers gave me the feeling of power and magnificence from a location that can't be beat.

On the ground in between the towers I remember looking up at both towers and sort of spinning around, it almost made me fall.



This closely resembles the image in my memory. Just spin your monitor around a few times and see if it doesn't make you a bit dizzy.

I just loved being there in a way that I could never describe it. In the summer of 2001 my wife and I were given two tickets in a luxury booth at a Phillies game for a wedding present. While we were back east we took a day and went to NYC. On the agenda was visiting the WTC. One thing led to another and that plan was scrapped because of time. But that was okay we though because we'd make sure we make good on those plans the next time we visit NYC.

Then 9/11 happened like two months later. I just remember that morning turning on the TV as my wife said something was happening there. The TV clicked on just in time for me to see the second tower fall (remember I live on the west coast). Just like that the towers were no more. I immediately thought of those days as a youngster in the city and the other visit just a couple of months before. I held those feelings first because I had no idea what had happened with the highjacked airplanes, the terrorists, the crashes, or the suffering of the thousands who were trapped.

I took it for granted that the Twin Towers would be there forever. The loss I felt that morning for those buildings... those buildings... was like the feeling when I've lost a friend or family to death. Of course just a few moments later I began to catch up on the events of that morning that led to the destruction and obviously like the rest of America my feeling turned towards those who were killed and those who were losing their loved ones.

I won't turn this into a political post or a tribute to any of the victims. Others do that much better than I do (in fact check this out, you will like, great job Jay). This effort was just my way to remember a property with tall skyscrapers on it that filled my memory banks in a way that no other place has. The NYC skyline has always been my favorite site to see. Other buildings will be going up in the Twin Towers place but my memory will always have a clear picture of the beauty that was the World Trade Center.

Carnival of Real Estate at one of my favorite sites...

In my short time as a blogger I've come to really enjoy one site in particular. It is the Real Estate Tomato. The information there is great, please check it out.

This week the Tomato is hosting the Carnival of Real Estate. All kinds of relavant information. So hurry, hurry, hurry, and step right up.

I think the other reason that I like the Tomato is because I like eating tomatoes. I was eating them while I was watching week one of the NFL football season all day long. A little salt, olive oil, pepper.... Mmm, mmm. Sometimes balsamic vinegar and fresh cheese, oh it's all good. I also notice that I get hungry after viewing the Tomato blog. I don't think that was Jim's intent, but whatever.

Rough week for my blog...

Sorry that I haven't kept up last week. Business kind of picked up somewhat, that's the good news. The four meetings I attended on behalf of the Association or the new WARDEX outfit really put a kink in my attention to this blog.

Thanks for continuing to stop by. New info this week I promise!!

Wrap up on proposed Minor Land Division Matrix public forums

I will try to remain composed as I rerun yesterday's public forum/workshop/meeting/fiasco or whatever anyone wants to call it. Blood pressure is already boiling.

On September 7th, 2006 the Mohave County Planning and Zoning held the second in a series of two public workshops on the issue of the proposed Minor Land Division Matrix. From the beginning, the Kingman/Golden Valley Association of Realtors has raised our objections to any kind of plan along this route.

To me the fundamental issue is that the Commission believes it needs a guideline (as some members of the panel call it) so they can make better decisions on whether or not to allow rezoning and/or lot splits. So the Commission is attempting to put together a document to use in this manner, it is being called the 'Matrix'.

One panel member (hellbent on passing such a measure, Larry Sinagoga) said that private property owners should know ahead of time, before they even dare to apply to make a request for a rezone, if they would be allowed ask for a request to rezone. Huh?? You mean to tell me that a piece of paper that is not a law should be my determining factor on whether or not I'd like the County to consider my request on MY PROPERTY?? Mr. Sinagoga and the other esteemed members of the Commission will one day cease to serve on that panel, but their legacy is to be producing a piece of paper that would limit any chance for a private property owner to inquire about rezoning his/her property.. I just don't get it.

To top that off, Mr. Sinagoga also stated that the Matrix would only be a guideline and private property owners would still be able to make a presentation for a request for a rezone in front of the Commission... again, what?? Well why have the 'guide' or the Matrix then in the first place if you are still going to consider a special exception from one of your buddies??

See, lets say you own 40 acres in a rural part of Mohave County right now and it is zoned AR-36 which means at the present you wouldn't be allowed to split your property into two plats. Hey no problem really, but maybe in 5 or 10 years you decide that maybe it's time to see if you can change the zoning requirements so that you could maximize your property investment. Right now you file a request with Planning & Zoning, they do some amount of research, notify other property owners in the area, and recommend you to make your presentation at the P&Z Commission.

Now your big day is here and you make your case in front of 8 members of the Commission. They weigh their decision based on whatever criteria they have in mind and on other presentations for or against your request from other human beings. The tally up their votes and notify the private property land owner. In this example, lets say you lose to the tune of 5 against to 3 for. You then get a chance to challenge that decision in front of the County Supervisors who have the final say (for clarity the Commission could rule in favor of the request but the land owner would still have to wait on final word from the elected County Supervisors).

To me this is the way it should continue to be done. What the P&Z staff and some members of the Commission are doing though is trying to lessen the workload. There has been hundreds of requests for rezones each month since the word got out about how great of an investment land is in Mohave County. Too much work for the publically paid employees of P&Z and too much paperwork for the volunteer Commission. This is where the proposed 'Matrix' comes into play.

If the 'Matrix' is passed then all of the members of the Commission will be forced to use that piece of paper as the prevailing guideline for their decisions... until of course they let one of their buddies have a waiver or an exception... which they clearly said they would do. Also they are hoping to stop the requests from land owners by showing them the 'Matrix' before they even are given an application for rezone by saying basically that you have no chance at your due process before the government that your property taxes are paying for, thank you very much, don't let the door hit you...

To me, the Commission IS THE MATRIX. I simply could care less if Mr. Sinagoga wants to use his own guideline to make his decision, but I don't want his guideline to be the rest of the panels guideline for determining their own decision. Mr. Sinagoga would never allow me to rezone any land in Mohave County and that is fine with me... but he is not the Mohave County Zoning Czar. In fact there is no such position in the County. I'd like a chance to make my case to the rest of the panel though. The proposed 'Matrix' takes away my opportunity for my voice to be heard... unless they are going to grant me a waiver or exception... which makes no sense. Why have the stinking piece of paper in the first place then??

My comments to the panel basically covered that. Of course I was a bit nervous and I should have said more (I even had more time to do so), however I was the last public speaker on the slate and it was getting late. I did make the comment that the Commission should ask the County Supervisors to excuse the Commission and instead place a Czar in charge of county lots splits and rezones. I don't think that went over very well with the panel or P&Z staff.

My Association has asked the County to consider adopting ARS 11-809 which would bring the County into compliance with state legislation on these matters. Of course many on the panel don't like that because it becomes an ordinance and not some silly guideline that no member of the public voted for. This is government employees running the roost instead of listening to the public on the matter. The 'Matrix' was the idea that came from P&Z staff and they have done their best to lobby the Commission to adopt such a measure. In fact they are already using it to deny, deny, deny requests from the public.

Once all the members of the public had their chance to say, the panel began discussions on altering the 'Matrix'. Right there on the spot they wanted to come to an agreement on a guideline to use. One of the members of the Commission, Bill Abbott, remarked that they were supposed to report to the County Supervisors their findings at the public workshops. He then noted that most of the members of the public voiced out against the use of ANY kind of 'Matrix' or guideline (to which he received a round of applause) even though he himself would be in favor of some sort of guideline. So what did the panel do anyway?? They went on to create a 'Matrix' in the face of the public that just spoke out against having such a guideline. Gee thanks for wasting two afternoons of my time. The panel, not as a whole, has an agenda and it is clear that the tax payers of Mohave County simply do not matter. I left the workshop as the panel continued to alter whatever 'Matrix' they were working on, so I don't know how it all ended before the workshop broke for the evening.

To the Commission... please consider the fact that you are there for a reason. Sometimes that reason is to make difficult decisions that could affect either or a combination of the County, the private land owner making a request, or the private land owners in the area of a potential rezone of property. If you plan on relying on a piece of paper to make this decision, fine, it is your choice. But please don't expect that each and every member of the panel has to use the same criteria to make their own conclusions. Not only for the current Commission, but for P&Z Commissions of the future. How dare you think that your silly proposal (given to you by publically paid government employees) shall be the standard that all private property land owners must adhere to. It is just wrong.

What's next?? I was invited to speak to some republican group (can't remember the particular name of this group) next week, and also invited is a County Supervisor (Buster Johnson) and the Chairman of the P&Z Commission Earl Hamlyn. Oh I do hope Mr. Hamlyn makes an appearance.


Related Posts

Tuesday's public workshop at P&Z

Land split matrix (again)

Draft resolution to defeat the 'Matrix'

Mohave County P&Z Land Split Matrix Proposal...

See here...

It's just not possible to agree any more than I already do with this fine article on the BlueRoof Blog. Greg may be rehashing this article but no matter, it is damn fine reading and client-centric.

Money quote for me...

The value of a good Realtor today is more facilitatory. They coordinate the home buying or selling process and give area knowledge and expertise to their clients while protecting them and their best interests.

.... If leadership doesn't turn this into some kind of mission statement or vision statement then all hope is lost. Well... I don't mean to be that dramatic but you get my drift.

It's carnival time again everyone...

Carnival of Real Estate is up at Nubricks.com. Come out and see what everyone is blogging about in the real estate world. Wow, this was a great collection of work.

The big news in the industry...

On September 3rd this gem of an article was published by the NYTimes. Please read it over when you have a moment. To me this article represents part of the all out assault on the real estate business. Yes of course there happens to be many more challengers on the market for various levels of service that a consumer would find useful in a real estate transaction to choose from these days, I don't deny it and in fact I have my arms wide open to those challengers.

I'd like to do a lengthy post here to tell you all of the in's and out's of the NYTimes piece, but Jim Kimmons at Transforming Real Estate pretty much nailed it.

As agents and brokers, we are way overdue with educating the public on the service we provide and in turn, how we are compensated. I've said it before that all things are negotiable in coming to an agreement to hire a real estate agent to help you buy or sell real estate. There is no one way, or one rule to follow.

More on the listings report...

Like I said in my previous post, I thought there was something up with the new construction listing numbers that entered contract last month.

24 new construction homes entered into contract (average asking price $283,892, median asking price $289,900). All right, time out. The average asking price of a new construction home jumps -- in one month -- UP 28% and the median jumped 50%!! I'll be looking into these numbers a bit more. I'm going to guess that builders really were handing out deals last month. There may be huge discounts in price. Please remember that the figures shown here are based on the listed asking price, I won't know the final sales price until the transaction closes and is reported. But I assure you that I'll be on it.

This is what I posted late last week. Well looking closer at these figures I noticed that 20 of the 24 listings were sold in one particular subdivisions. 9 of these listings hit 'under contract' status on the same day and all of them are scheduled to close escrow on the same day (9/15). My take is that an investor gobbled all of these up. If I am right I'll bet the final closing price would be for much less than the $153 a sqare foot asking price was.

I wish this was a sign of a turnaround in the market (to the positive) but I'm having a hard time believing that only this builder is having success while the rest of the new construction homes just sit there. Had to have been some kind of deal with an investor. All of the homes are on the same street.

Plus if I look again I notice that 5 listings offered by the same agent and builder hit the market on 8/28 and took contract on 8/31 and are scheduled to close on 12/31 of this year. Of course I'll follow up when the properties close. I really hope that my feelings on this are wrong, I hope this is a sign of good things to come.

August listing numbers report (2006)...

I think the word I'm looking for is HELP!! Have we learned nothing?? This summer has been dead as a doornail but the asking prices, as you will see, continue to climb. I'll do a preliminary look at the sold data at the end of this report (and follow up with the official report in a couple of weeks) and you can tell me what you think.

Today total listings available for single family residence equals 785 (up from 768 at the start of August). 303 are new construction homes and 482 are existing homes on the market.

There were 168 new listings for the month of August (173 in July). 1 home has already closed and 11 have entered contracts. The average asking price for these new listings is $266,750 (up from what I thought was a more reasonable $248,605). The median asking price is $229,900 (up from $219,900).

55 new construction homes listed (average asking price of $283,772, median asking price $269,900). Zero of these have closed this month and 8 have entered into contract.

113 existing homes listed (average asking price $258,464, median asking price $209,900). 1 of these has already closed and 3 more have entered contract.

59 homes entered into contracts in the month of August (up from 48 in July). The average asking price for homes that received contracts was $227,619 (up from $212,516 in July) and the median asking price for July was $225,000 (up from $189,975 in July).

24 new construction homes entered into contract (average asking price $283,892, median asking price $289,900). All right, time out. The average asking price of a new construction home jumps -- in one month -- UP 28% and the median jumped 50%!! I'll be looking into these numbers a bit more. I'm going to guess that builders really were handing out deals last month. There may be huge discounts in price. Please remember that the figures shown here are based on the listed asking price, I won't know the final sales price until the transaction closes and is reported. But I assure you that I'll be on it.

35 existing homes entered into contract (average asking price $189,033, median asking price $169,900). Both of these number are down from last month 10%. That's right DOWN!!

When a listing enters into contract it is very probable that the transaction will close and property will change hands. From this report alone I am left scratching my head.

I'm guessing that builder are dropping their prices to enter into contract... I'm guessing. But then they turn around and ask for an increase (in average listing price) of 16% over last month. Maybe the builders are just having more success?? Again, I'll have to look into these numbers more closely as the sales figures for the month become final.

But there is no excuse for the existing home seller to be setting a higher average listing asking price. Even though it's only 2% higher than last month, the contracts entered into on existing homes FELL nearly 10%.

I am continually blown away at local MLS meetings on Wednesday mornings during the hotsheet report of how long it takes for everyone in attendance to list all of their price reductions. It literally takes longer to announce those price reductions than it does for the agents there to feature their new home listings. It wouldn't take so long if the price was set correctly based on the market in the first place.

My preliminary sales report for the month of August shows only 62 sales with an average sales price of $210,000 and a median price of $191,000. I'd say the path to success leads from reality and the new listing information hardly reminds me of reality.

I'll be running a report on price reductions when I get a chance. Maybe even this holiday weekend.

For now though, I'm on my way out to Las Vegas tonight for a concert. I'm getting too old for these kinds of events being it is a rock concert and all, however after doing this report I do need to bang my head and might as well do it at a concert.

See you all later and have a great and safe holiday weekend!!

Ryan Howard... MVP!!!

I haven't really shared my love of sports on the blog, but my first ever post sort of covered it.

While I was putting together my last post, the Philadelphia Phillies first baseman Ryan Howard hit an absolute bomb of a home run!! Now I haven't seen it yet, I'm only going by the descriptions I've read on a team message board -- I'm still at my office for crying out loud!!

I'm only noting it because it was his 49th of the year and that breaks a team record. Hall of Famer Mike Schmidt (an all time favorite player of mine) held the record of 48 since the 1980 season. That season the Phightin' Phills' won the World Series. Ahh what great memories... I was in third grade and it is about all I can remember.

Anyway, congrat's Ryan. I think he is a special player and I hope he is playing for a special team (however please note, as a sports fan of teams from Philadelphia, I never really get my hopes up too much). I can guarantee you that if the Phils make the playoffs you won't be seeing any posts during those times when the games are on. Still another month to go, but my excitement level is rising!!

Look for my listings report on Friday. I'm heading home to see the highlights!!

Edit:

Of course the Phillies totally blew that game against the Nationals that night. But over the weekend Howard went on to hit another 3 HR's in one game and one more on Labor Day!! The kid is on fire.

Newpaper print ad vs. the Internet

As I alluded to in a previous post, I'm looking ahead and am actively marketing my listings on the Internet instead of using more traditional forms of advertising, such as newspaper ads that typically appear in the classified section.

This news release by the Classified Intelligence LLC firm speaks to what is currently happening with a grim look ahead for newspaper advertising from the real estate profession. (Hat Tip to the Future of Real Estate Marketing)

Our own local newspaper also produces our monthly real estate guide magazine. In addition to that magazine they also have an online service to advertise listings from the local MLS (soon to be Data Exchange). You can see an example of a listing right here.

This was the first year I have experienced a lack of response from newspaper advertising, but it is a slower market than in recent years. And to be honest I haven't seen overwhelming success on my online advertisements, but I am a believer in this method 100%. Some of the lack of success I attribute to the size of my market. Kingman is not a large metro area by any stretch. In fact I also believe that the local market is a tad behind other areas in Internet use. Most of the time that I have received interest from the Internet advertising it has come from people who are living in another area and are planning to relocate to Kingman (or in my service area).

My expectation is that this will change in the very near future. There are currently plenty of listed Kingman properties on many of the popular search sites and I love that I can track the listing page hits on most of those that I have placed ads on.

It is not the wave of the future, it is happening right now. Make sure you ask your Realtor of choice his or her plan on how they intend to market your listing on the Internet. You will want as much Internet presence as possible, especially competing to sell your property in this current buyers market.

Wednesday's WARDEX meeting...

As I've posted about before, here regionally with two other Associations we are creating a new MLS organization. We are moving away from calling it MLS and now the buzzword is Data Exchange. The Western Arizona Realtor Data Exchange (WARDEX) had it's first meeting of interim directors on Wednesday. At the meeting we chose the interim Officers that will reside over duties until the permanent Board of Directors is selected by each of the Associations and installed in January 2007.

I'm happy to report that I am not an officer, but I am an interim director.

I will be using this blog to start letting the cat out of the bag on issues that will affect the Membership of KGVAR. I'm doing this because of the loyalty to the Association I have as president. There will be big changes that all Members will have to endure. Change is not easy for Realtors, duh...

First thing is that I've already mentioned that the interim board is in place and handling business.

The Board came to an agreement on the cost for the new service that each Member will pay for use. It will be an annual fee of $240 for the year. There won't be a monthly bill, there will be prorations offered on a quarterly basis, and there will be no refunds if a Member drops out of the service. The first time a bill for the service will be issued is in April and it is due May 1 and is delinquent on June 1.

The Board began to critique further the bylaws and the rules & regulations of the new organization. I'm not going into those details until the legal department looks over the changes.

We also agreed to formerly pass on the information for training of the new MLS (oh I mean Data Exchange) product that all Members will be using starting on October 25 of this year. You can view that information as it pertains to my Association right here.

The officers are; President -- Evan Fuchs from Bullhead City, Vice President -- Cheryl Westwood from Lake Havasu, and Secretary/Treasurer Ben Gangloff from Kingman. (Ben I can't find your website!!)

Lastly we agreed to meet the first Wednesday of each month and rotate the location of the meeting between the three Association locations. It's also likely that we will have supplemental meetings as we get ramped up.

Contact me for more information.

Wow, lots of stuff happening. No wonder I'm at my office ususally by 6:30 am and leaving for the day pretty close to when it is dark (and the days are getting shorter).

Tuesday's public workshop at P&Z

Didn't have an opportunity to post yesterday because of many meetings I attended, but on Tuesday I attended the 'public workshop', if you want to call it that, with the county P&Z commission. It was public, but there wasn't all that much working happening there.

Members of the public who wished to speak were given two minutes by the panel. Most folks had much more to say on their feelings of the proposed land split matrix. On many occasions the panel did have questions or were seeking further comments from the speaker.

Most in attendance were against the proposed land split matrix. However the commission continued to insist that they only proposed the matrix to use it as a guide to help them make decisions on whether or not to recommend a request for land division and/or rezone. And to my disdain some on the panel were basically saying that they thought the rights of the non land owner should supercede the rights of the landowner. NO... NO... NO!!!

What I mean is the example that one commissioner used was if a landowner wanted to legally split his property but his neighbors did not want to allow for a split, that the commission should consider the wishes of the non land owner. The key here is legally!! There, that is their guide. If it is legal the land owner should have his/her request granted.

The panel continues to say that this is about rezones and not about splits. But the matrix is for the division of minor LAND SPLITS!! And the commission has been using their made up guide (that elected officials have not given them the go ahead to use) to deny request for land splits.

Now, our Association (KGVAR) has submitted a draft resolution to the county. It was given to the County Supervisors and I know that P&Z staff has seen it. However no one from the county has shared this info with the P&Z Commission (the commission now has each their own copy). It really seems as if many on the commission are bowing to the P&Z staff and nothing more. Not all commission member, but enough to give me pause.

There is another public workshop scheduled for September 7th at 2:00pm at the county building in the auditorium again. I will once again attend and will ask that anyone who is in opposition to the proposed land split matrix attend and let your voice be heard. I think we still have a battle on our hands.

Anyone know what a separated shoulder feels like??

Drats, I am in pain today. Last night was our last softball game of the season and of course I had to slide into home plate on one play (and skin up my lower leg), and of course tried to make a diving catch in the outfield.

On the dive (which I missed, my wife says by a mile but I think only by a half step) I landed on my left arm that was stretched out. I didn't notice anything at the time, or even at all last night. But this moring my shoulder was sore and now it simply hurts just to raise my arm.

I'm 35, out of game playing shape, and really shouldn't be diving or rolling on the ground at these events any more, but I must say that usually I'm good with pain management but not today.

What's any of this have to do with real estate?? Well I imagine that the pain I'm feeling in my shoulder is similar to the pain that many sellers are having competing with other sellers in what has been a rather slow time in our market. I hope my shoulder feels better later, and that I'll get some offers on my listings later. There, brought it back.

I'm off to the public forum on the land split matrix held today at the county office building. I'll have an update on that tomorrow, an offer on a listing, and a better feeling shoulder. See you then.

Real estate blog carnival time...

Check out this weeks carnival. Get involved with the discussions that will only better inform you. Head over to TheLandlordBlog and see what all the fuss is about.

Pondering...

Maybe some of the fellow bloggers can help me.

I downloaded this program for the desktop, windows live writer, to help me add content to my blog. It's pretty cool and easy to use. The reason this piqued my interest is because I have a devil of a time posting photo's with Blogger. Words are nice and all, but I have to get better with photo's because right after that I'm going to have be solid with posting video's (which for now I just link to other blogs that have the video I want to share).

Here is the only problem with the live writer program, it won't publish the photo's to Blogger. Pain in the you know what.

About a month ago, Greg Tracy calls me after I left a comment on one of his posts at BlueRoof Blog. He is a pleasure to talk with so I ask him about Blogger and how to work with it and all, he tells me about WordPress and how he is changing from Blogger to WordPress. He said it was easy and that I should look into it myself. I did produce a new blog site at WP. It's pretty cool to work with and I plan to make the jump when I'm ready.

Then I see a post at Greg Swann's site (Bloodhound Blog) about why WP is better than Blogger today. So I start to play around with my WP site again today and low and behold the windows live writer works rather nicely with the WP site. Accepts photo's and everything, real easy (even for me).

For now I'm going to keep messing around with this site right here. I'm tracking my increasing readership and am sort of put off by basically starting over again with all the site counts. Plus I'm just not totally cozy with the WP set up just yet. The help and FAQ talk over my head for now and I think Blogger is basic enough to learn the ropes.

If any of my bretheren out there want to give me some help feel free to do so. Email me or leave a comment. I'd appreciate it. Here is a sneak peak at my site at WP.

Land split matrix (again)

I want to thank the nearly 40 Members who showed up last Thursday for the meeting we had with the Western States Alliance regarding information on the county P&Z sponsored land split matrix that we are fighting as an interested party. Plenty of information was shared and I believe that more Members became aware of the issue and it will affect our business and more importantly our clients, the land owners of Mohave County.

Please do not forget that there will be a public workshop this Tuesday the 29th at 2:00pm at the county building. Plenty of attendance is what we are hoping for to get our message out.

First and foremost the P&Z commission is using their matrix to deny land splits, even though not one elected office holder has approved the use of the proposal. I see big time legal red flags with this practice and by no means does the Association want to see landowners get held up from their plans because of a class action lawsuit putting the kabash on county business.

Our Association, with plenty of help from the state Association (AAR), has put together a draft resolution for the country to consider. This will be the message on Tuesday, but please attend if you are local and can make it. This is a very important issue that faces all of us who reside in Mohave County today. There is strength in numbers, and I hope to see you there.

Related articles

Draft resolution to defeat the 'Matrix'
Board of Supervisors Meeting Today...
Mohave Country P&Z Land Split Matrix Proposal...

It's all about the water around here...

Many folks around the country have their eyes on the state of Arizona as a possible destination to live out their golden years when retirement time comes. I don't blame them. I'm pretty sure that I'll hang around after I retire as well (oh a long way to go for that Todd, don't make any plans just yet).

There is plenty of growth potential in my corner of the state. Plenty of cheap land (in comparison to say Las Vegas and Phoenix), pretty good weather (cooler than Phoenix and Vegas on the hottest days), emerging opportunities for commercial and service based business, etc.

However the catch is water. How much is there?? Will there be enough for all the boomers who are likely to start showing up oh, say right about... now??

Well my guess is it will depend on who you hire to do the water studies. It may also depend if you favor growth or not. There is a battle happening right now in Mohave County (MOCO) between the folks who don't want to see another soul move into the county and folks who want to develop the area and profit from their actions.

I'd like to know the truth, but I doubt the truth will be easy to point at anytime in the near future.

Here is an article that captures both sides fairly well from the local Kingman Daily Miner.

Continued discussion on listing fees...

Okay, my fingers are rested and I think I can continue this discussion about my thoughts of listing fees. Deep breath, here I go.

If you have been following along, I believe I described the various components of the listing fee. The MLS advertising fee, the expertise fee, and the marketing fees.

I was using an example of a $600,000 listing even though in my market it is more the exception and not the average price of a home. In visiting other real estate sites I just happen to see that $600K figure in the articles and the comments of various blogs.

If we were to supose that a seller offered a 3% commission to the buyers broker, agreed to compensate me for my expertise fee, and used the marketing package I described in my las post on this suject -- then a 6% listing fee would be the correct amount to agree to for a $330,000 listing.

1. $6400 for marketing costs
2. $3500 for expertise costs
3. $9900 for MLS advertising fee
   

$19,800 total divided by 6% equals $330,000.

So is 6% a good deal if your property is going to sell for $200,000?? Let's remember that item number 3 above (the MLS advertising fee) is factored on a sliding scale based on percentage. In general terms that percentage rate is 3%.

So 3% of $200k is $6,000. The expertise costs and that particular marketing package is a fixed cost in my examples ($9,900) and yes I would say that if you negotiated for a 6% fee as a seller you would indeed be getting a great value. A 6% listing fee for a $200k sale would equal $12,000 which is less than $15,900 worth of the service package a seller would be getting.

Ahh, but I can hear you now out there saying, "Come on Todd you can do better than that, give me a real deal." Okay, follow along.

The largest expense I have is in marketing. The most expensive cost in marketing is the local advertising in the newspaper. I said in the marketing post that I run a larger ad in the classifieds for the best exposure. I could save on cost by going to a more simple add or even just the really simple and small print in one column like all the unrepresented sellers do. It's one way to beat down the cost. Yet I have no interest in that. In fact I really have no interest in advertising in the daily newspaper any longer. I don't see the same return on the dollar spent as I do in other mediums.

So if you agree with me to not want exposure in the local daily publication we are on the road to making you a deal. But what do you get instead?? How about we start by placing ads on the Internet first. Google Base, Trulia, Craigslist, Propsmart, HotPads, Yahoo... these are all places that many buyers begin their search for new property. As I mentioned before my only cost to properly place listings on these sites is my time, and like I mentioned before my hard cost fee to the client is $200. This is a savings of $4,000 to this point. Pretty good eh??

Now I do recommend the Kingman Golden Valley Real Estate Guide for advertising. Why?? Locals pick them up at many locations in the area and folks passing through town also pick them up. When I take calls about advertising, about 90% are asking me about the ad they see on a particular page (where my listings are found) so I know they are looking at the Real Estate Guide. In my example I was offering a full page, but usually the quarter page works rather well too. Especially for home prices in the lower tier (like a $200K listing). For the 5 months that it would be advertised the cost would be $500.

Now I'm not a big fan of post cards or open houses. Lets agree that we won't use either of those marketing avenue's because you want a better deal. Okay, one open house after the first month. So add $400 to the list. Where are we??

1. $200 for Internet exposure
2. $500 for advertising in the Kingman Golden Valley Real Estate Guide
3. $400 for the open house event.

A total of $1,100. A savings of $5,300.

$12,000 is where we started for a 6% fee on a $200,000 listing. Now we are at $10,600 ($1,100 in advertising fees, $3,500 in expertise fees, and $6,000 in MLS advertising fees), this is now a savings of $1,400. You wanted a deal and now you have one.

But how good of a negotiator are you?? You can still offer less than 3% in the MLS. Offering 2.5% saves you another $1,000. Maybe you could get a good guy discount on my expertise costs?? Know someone who wants to sell their property?? I'll knock my expertise fee down $500 for you and the person you refer me.

The point of this entire conversation was to get you thinking about different means to an end. I don't consider my service to be 'discount' fees. You actually are getting what you PAY for. As I've been saying all along, everything is negotiable... and I mean EVERTHIING!! I also wanted to let you in on what is behind the 6% listing fee. I hope this helps clear the air a bit.

Comments please, lets talk.

Related articles

The advertising component of the listing fee...
Why 6%
The MLS and the client

Why is the MLS in trouble??

Well when you see comments like these...

Names withdrawn to protect... the pride of Realtors everywhere I assume.

"Open to the MLS, except for Agent X. He/She is not allowed on the property per sellers request. Seller will not consider offers where Agent X is the agent."

It's right in the remarks and to my knowledge the remarks are picked up at REALTOR.com. I just found this today, and as president of this Association, I hope to have this resolved pretty quickly.

Remember folks, the MLS is meant to be cooperative. That means cooperation. I learned about the word cooperation from watching Sesame Street as a youngling. I'm wondering if this has a complaint filed all over it??

I don't think the listing agent is doing anyone any good here. My first impression when reading this remark is that the seller is a hostile party. How long until my name gets added to the remarks?? There has to be a much better way to handle the sellers wishes here, and not dragging Agent X's name through the mud for all the Members to see would have been a fine place to start.

A good article for buyers on valuation...

Even though Ardell has called me misguided at times, I still read her stuff -- especially the stuff that pertains to the client. I think she rocks as a client first representative. I've even said that I'd hire her to sell my home.

Anyway check this out if you are a buyer for some good information on clear communication with your representative during the home or property buying process.

Through the eyes of the president

I'm trying to get more of the local agents to read this blog so I'm going to share some of the items talked about today at our Board of Directors meeting. And if you are a member of a Realtor Association you may be interested as well at some of these observations.

At the start of the meeting I spoke of the broker council meeting I attended a couple of weeks back and mentioned that I'd like to hear (as an Association Board Member) from them on a more regular basis. My hope is that they will get better organized then they have been for a couple of years now. Of course getting input from any Member has been difficult ever since I've been on the Board, apathy is mostly my gift from the Membership.

I gave the Managers report on behalf of our Association Executive because he is regularly seeing doctors to prepare for his prostrate cancer procedure. The Board missed his presence today and will do so for the length of time he will be absent from his position. Our AE is Frank Lessing, please keep him in your prayers for a healthy and speedy recovery if you don't mind. He has really been the glue to helping me run the Board this year. Even the other day I had him do some reports for me and he was still at the office at 8:30pm as I went by on my way home. His emailed reports hit my email at 8:47pm. I'm such a tough boss. Anyway, Frank get better we all miss you.

We discussed the situation ongoing about the county's land split matrix and our draft resolution we (as part of the state Association) presented to the county. Plenty of work to be done and our eye must remain firmly on the ball because we are in for a fight to defeat the matrix. Today there is another meeting for Members of the Association at 4:00pm for more information at the public library meeting room. I'll be there and hope to see about 30 to 50 Members there.

The Board then agreed on how the Association will furnish representation to the new regional MLS (WARDEX) Board of Directors that is fairly close to launching. The brokers council will select, at their meetings, two of those representatives and each year the Association president will also be a member of the WARDEX BOD. There were some conditions that a broker would have to meet to be considered by the brokers council, but in my opinion it is up to that group of brokers to choose the best qualified representative to serve what will be two year terms to the WARDEX organization. Yes, the onus is on the BROKERS... are you listening BROKERS?!?! You wanted control of WARDEX and this is how you will have that control. Now... do me proud.

I'm starting to leak information to the Members on the cost change for membership to the Association. The bulk of the Association revenue for years came from the MLS, well our KGVAR MLS will be dissolving to make room for WARDEX and with that the revenue goes bye-bye. So the annual dues are sure to increase. Currently those annual dues are $141 a year, I expect them to be in the $325 to $400 range to make up for the lost MLS revenue to run the Associations expenses. This subject will be on Old Business for at least the next meeting. Meanwhile we must have a Budget Committee meeting hosted by our Treasurer very soon. Once that meeting date is settled on I'll be going to the Members to ask for their attendance for input and simply for information purposes, as change is a comin'. Change can be hard for Realtors??... duh.

Lastly, for the record this morning I announced the going 'live' date for the new MLS provider. It will be October 25th. I eagerly look forward to that date because I hate my current providers product (Paragon 1 and Voyager... if you are in the biz I bet you hate these products as well). Training classes will be held two times a day for the week of Oct. 16th through Oct. 20th. The Board talked about making it a mandatory session, but we instead are putting the onus on the BROKERS whether or not to make those training sessions their requirement of the Agents in his or her office. Should be interesting. I personally do not wish to attend those training sessions because I believe the new product will be very easy to use and a few hours for me on the system to play around with the features is pretty much all I'll need.

I want to thank the Board Members for their attendance and input today. Also I'm so happy with the committee's that were represented as well. And special thanks to the FOUR other Members who sat in on this meeting. Their input was valuable as well. I just wish more Members would bother to have a glimmer of interest.

Members make or break the Association. Get involved.

What he says...

Here is a two part look at a recent article in The Economist magazine about real estate markets. I tend to pick up this magazine when I travel on an airplane somewhere. I find the articles very interesting but I will admit that sometimes I don't fully understand what I might have just read.

In this case David Smith from the Affordable Housing Institute helps spell things out. Give these articles a read.

Article one

Article two

Pay special attention to the five different kinds of buyers he describes in the first article.

The advertising component of the listing fee...

This is another installment of how the listing fee that is negotiated between a seller and a listing broker may apply.

In 2004-05 this would have been a total waste of space. Why?? Because by the time I may have had a yard sign placed in front of the property and the listing placed in the MLS, it was likely that I'd already have appointments from buyers who wanted to see the listing. In other words there wasn't much advertising that was needed to be done because the market was so incredibly active with buyers looking to acquire property.

Of course that has all changed because of the shift in the market, a market where the buyers have a position of power.

In my last article about listing fees I used an example of a $600,000 listing, with a 6% listing fee that would equal a possible commission paid by the seller of $36,000. Yes, it still looks like a lot of money and it IS!! I've discussed that in normal practice half of the $36k gets paid to the buyers broker leaving $18k for the listing agent. I then went on to say that a portion of that amount is collected for expertise costs. It was explained that a fair amount that I would negotiate for if I was only handling the documentation and negotiation of a transaction on behalf of a seller would be $3,500. Now we are down to $14,500 remaining of the listing fee commission that I would normally collect.

Again I am facing a softer market for sales when representing a seller, so it is imperative to advertise the listing so that any potential buyer for the listing will be aware of the property I am representing on behalf of a seller.

There are many, many ways to advertise a property. First of all a listing placed in the MLS will automatically be listed on the public web site REALTOR.com, where buyers who have an interest in purchasing property in a particular region or city can search for properties that could possibly meet their needs and buying criteria. Although it seems free, a seller actually pays for this advertisement through the MLS advertising fee. It's hard to see, but trust me it is there.

Other avenues of advertising also do not seem to have a hard cost. Currently I am becoming more familiar with other searchable web sites for the advertising of property (Trulia.com for example). I am finding more and more of these types of sites all the time and since the greater portion of potential buyers begins their search for properties on the Internet it is very important to place listing information on those sites for greater exposure. Again this appears to be a soft cost, but it takes real time and effort to place those listing on those many sites. So I've put a hard cost to this practice to the tune of $200.

There may be a time when another web related company that acts as an MLS in our local area becomes a viable option for advertising listings and they may charge me a membership fee of some sort. My plan is to pass on this cost to the seller as an advertising fee, since I am not aware of any such marketing avenues that would produce interested buyers at the moment, I won't offer a guess for this service at this time.

I let my clients know that I'll put their property on my own personal web site as well, and will do so for free. I also follow up by saying that my site does not get the traffic that the other sites do, so I feel this is a fair because I usually only have a handful of listings promoted on that site and it would be unlikely that the right buyer will find toddtarson.com and find the exact property they are looking for.

I also will post the yard sign and allow use of a lockbox for the term of the listing at no charge. The yard sign is a major tool to attract buyers interest who may be looking in a particular area of town and may not be searching the Internet for possibilites. But also having the yard sign in the front yard also promotes my business to other potential sellers. In fact I believe that yard signs are the best advertising for me personally to attract selling clients. The more they may see my name in front of homes for sale the more they are likely to at least contact me about a possible listing opportunity. So to me this is a win-win for me and the client so I don't consider the yard sign as a cost to the seller. (Many brokers and Realtors may disagree with me on this)

So we have the sign in the yard and the listings featured in multiple Internet real estate related websites, and at a very agreeable cost to the seller ($200) to this point. What's next?? More traditional advertising methods. Ones that I'd like to see go away over time because in my opinion they won't be worth the money spent.

Currently some of my listings appear in the local monthly real estate magazine (the Kingman/Golden Valley Real Estate Guide). Each page that I contract for has a set cost that I incur. When a client wishes to have their listing appear in that magazine they will pay $100 for a quarter page, $150 for a half page, or $200 for a full page of exposure in each month it appears. Normally a quarter page will do, but if I was listing a $600k home it is likely that the client (in my market) would like the best exposure meaning a full page. If I am in a 6 month listing agreement with a client it would mean 5 months of advertising to the tune of $1,000.

Another resource of advertising is in the local classified ads in the newspaper. Costs vary for this kind of ad, but I normally like to place a larger ad than what is found in the classifieds (other real estate agents also do this), it would include a photo and some description of the home. This ad would cost the seller $100 per day, and usually the ad would run in spurts of a week here and a week there. Maybe two weeks out of a month but more like one week. Because I could advertise in the newspaper right away I figure $700 a month times 6 months to the tune of $4,200 for the listing period.

How about the ever present open house event?? I am not a big fan of these types of events in general, another post for another day. However, sometimes a client will insist on my holding such an event. The cost for open house that I pass onto the seller at close of escrow is $400 per open house. All inclusive. So figure holding two of these events during the listing period for a total of $800.

Post cards are another more traditional method of advertising, more specifically 'just listed' postcards. I know many Realtors that have had success with this method and are loyal to it and do this for each and every listing. I never had much luck using postcards so it is not a staple of mine. Nonetheless the fee I would pass on to the seller would be $2 per post card. I haven't done this in so long that I'm not sure what is the correct amount or average amount of postcards to send out. In my smaller market, I'll say 50 so that would be a cost of $100 per run and it would be likely that I may do two runs throughout the life of the listing, so figure $200.

Now you might be asking if I'm adding some profit into my actual costs for the items listed above and the answer would be yes. But think about it this way, if you had listed with me for six months and I forwarded these costs to you, you would have a bill for...

$200 for internet exposure
$1,000 for ad in real estate guide
$4,200 for newspaper ad
$800 for TWO open houses
$200 for TWO runs of postcards

$6,400 would be the grand total for this marketing package. After splitting the listing fee of 6% of a $600,000 listing my commission was $18k. After my expertise costs were subtracted from the $18k that left $14,500. Now subtract the $6,400 spent in advertising and there is still $8,100... hmm... what to do with all this money?? Think the seller would like to add it to his or her proceeds?? You bet they would. Which is exactly why I would be willing to negotiate any and all aspects of the listing fee. Honestly the $3,500 for expertise costs and the advertising fee costs that I collect from a successful transaction leaves me, ME, with enough revenue for a profitable business.

A follow up to this later.

Related articles

Why 6%
The MLS and the client

Success..

I did my first trackback ping today for the carnival post.

The blog books I bought, and the information on the web that I viewed, all said trackbacking was easy. It was an easy concept. I understood what the resources said, but it was actually difficult for me grasp the functionality.

I thought I'd catch on to how the blog stuff works over the past month or so, but so far I have not. This HTML stuff... I really haven't grasped any of it. I want to make my site as good as the many other sites that I have linked on the right hand side of this site (and many others that I haven't had a chance to). Gosh darn they all make it look so freaking easy.

I really feel like the kid that skipped school on the wrong day.

Carnival of Real Estate is up..

Over at the Pine Needle Lawn you'll this weeks edition of the carnival. Ride the rides and win your best girl a teddy bear!!

Mid month forecast...

There was an episode of Seinfeld where the crew was excited to see a movie called 'Prognosis Negative'. The character George said those words slowly and in a sort of scary manner into the intercom at Jerry's apartment when Jerry answered. Well, that about sums it up for the usually strong selling season here in Kingman.

I am forecasting around 50 sales for the month of August, and about 47 listings to go under contract. If you look back at my charts you will see that is really weak if I am correct or even nearly correct.

The only glimmer of good news for a change is that I think listing activity will take a hit as well, down to 156 for the month. Down is good on that number, but it is hardly enough. I guess the real estate sign making business is going gangbusters.

I'll do a full listings report the first of the month.

Why 6%??

Here is a question I get from clients who are considering listing their property with me, why 6%??

I'm also seeing this issue discussed on RE blogs all over the place lately as well. This is my answer, it doesn't have to be 6%. The fee you agree to pay the listing broker can be any amount you wish to negotiate for. The 6% figure has been sort of a main stay in this biz for many years. (For clarification, this 6% fee is a typical fee for the sale of a single family home -- fees are different for modular homes, raw land, and commercial property -- I'm only speaking in general terms for the sale of a single family home on this post)

Prices of homes has shot up all over the country, Kingman is not on a price level with most other places that I follow and read about. There really aren't that many opportunities to sell $600,000 homes in my local area. That is more the exception and not the rule. But people use the $600,000 figure all the time and 6% of that is $36,000. That seems like quite a fee, and you know what I agree!!

A couple of posts back I spoke of the MLS advertising fee that sellers agree to pay for their listing to appear in the MLS. So if I were listing a $600k home for a 6% fee, typically it would mean that the buyers broker would collect $18k from the successful transaction. Again, WOW!! That seems like a lot of money, and it is. However, like I said before that figure is negotiable. You have to check what the going rate in the MLS is for what others are offering on MLS through a broker/agent. Maybe it is 2% or 2.5%, or even some sort of flat fee.

What I'm going to do here is look at my side of the fee if I was the listing agent in this case and an agreement was entered into by a buyer (that was represented by another broker) and a seller (that I was representing).

Would I like to make $18k on a sale?? You better believe it. Would I make that amount though?? No I would not. Not in reality. The MLS advertising fee is one component of the total fee a seller agrees to pay a broker/agent. The other components are more traditional advertising costs and expertise costs. I'll explain both.

I'll start with the expertise costs. This basically regards compensating me for my skills in handling all the necessary documents and negotiations in a transaction. Think documentation fees. We first start doing a comparative marketing analysis of a property, this could include time spent with me driving by other listings currently on the market or recently sold homes for better perspective on what we are comparing. Then I help facilitate filling out the sellers disclosure forms, researching basic title information, verifying pertinent facts about the property, filling out data sheets for the MLS (optional) and submitting all of the information where it is applicable. There is other information that I obtain as well, the point is that the clock is ticking because I am working for the client to provide all of this on their behalf and I get compensated for my time and efforts.

Honestly, to this point, this does not take a lot of time, but it does take expertise. Why?? Because I have been doing it now for some years and I have it down to a system that works for both my clients and me.

I'm skipping over the advertising costs here for a bit (and probably will offer a whole different post on that later as this post continues to get longer). So next comes an offer from another broker to purchase the listed property. In Arizona the real estate purchase contract is quite long and there are many possible addendums that could be included. It is my duty to thoroughly review all the documents to have a clear understanding of the offer. Then it is time to convey that information to the seller. Most sellers want the bottom line dollar figure so I produce an estimated net sheet for them to review that estimates the bottom line.

We are now in the process of negotiation. Because the current market is one where the buyers have the upper hand, this probably means a counter offer or a series of counter offers could be in the works. This is my favorite aspect of this business, it is where I really shine. I love the black and white of a printed document, just something about it that feels so right. This is where deals and made and broken, this is where I'm my clients guard dog and I have no problem showing teeth once in awhile.

Okay, now we have an agreement. Now it's on to playing quarterback for me. This is where I stay in touch on a timely basis with the buyers lender (if there is one), the buyers agent/broker, the title and escrow company, and the multitude of inspectors and appraisers (if needed) to insure all of the documents are in accord to the agreement. On most occasions there are situations that arise that could threaten the agreement, this is what I'm on the constant lookout for. I practice this business this way, if the deal fails it's on me... no matter who could be at fault for unhooking a deal. If a lender is slow getting doc's in, or the title company mixes up some of the documents, or the buyer starts to get second thought, or whatever... it's on me at this stage to keep things on track. If you are selling a property how much is this expertise worth to you??

How much?? Let's negotiate it, because it is worth a different amount to different people.

I won't speak for other agents or for brokers. But I'm willing to charge a fee from a negotiated flat fee to just having it included in the 6% more typical fee that most people are familiar with. I will say this though, the work I just described above is the same kind of work I do whether or not the property is worth $600,000 or $50,000. To me it does not matter. The flat fee I offer for the work above is $3,500.

Tune in later for the advertising component, I'll also do a summary for a clearer understanding on how anyone can negotiate his or her listing fee agreement.

Photo from my trip last week

This is a photo of the lake where I spent most of my time last week. I was in Michigan in the Irish Hills area. Wow what a great place. You could call me the tomato burgler because it seemed everyone had tomato's growing and they were just oh so good. My lunch consisted of a swiped tomato every day I was there. Yummy.

I really want to thank my buddies Joe and Art here in Kingman for inviting me along. They have invited me for the past few years but I wasn't able to go for one reason or another. This year, this trip, was just what the doctor ordered.

I also want to thank Joe's sister, who lives in the Detroit area, for letting me come out. Both Rose and her husband Dan own a nice cottage on Crytal Lake in the Irish Hills area. Their place is so ideal. The cottage is right on the small lake, only electric motored boats are allowed on the lake so it is very peaceful there all day and night.

Many other thanks to Joe's Dad, Joe Sr. Papa Joe was always fixing up something for breakfast for those of us that hit the lake very early in the morning when we returned. Plus he had his homemade red sauce there for a pasta night, I'll just say I indulged three plates worth of pasta and probably should of had more. Also Rose and Dan's next door neighbors were very friendly. Matt and Gina said they might be selling their place and believe me I went through many scenario's on how I might be able to buy their place (I haven't come up with one as of yet that would make sense).

My pal Art caught the largest bass on the trip, it was over 19 inches. I got myself a nice 18 incher but I'm still waiting on the photo's of that fish and me. See it was just Art and I on the boat when I pulled in my personal best bass ever and we did have Joe's digital camera with us. However, Art couldn't figure out how to power up the camera so I traded him the fish for the camera. I snapped a photo of the fish, but Art was holding it. Joe Sr. was on another boat and they swooped by and took a photo with me and MY fish, but I just don't have the photo yet. Yeah, I know it sounds like a fish story, you'll just have to trust me.

Our host Dan caught the largest fish on my visit though. He landed a 27 inch walleye.



This is me on the last day with a 16 to 17 inch fish. This fish was also photographed with Art and Joe like they caught it. (Yeah, another likely fish story right??)

Anyway, thanks again to everyone for the truly great time I had. Hope to do it again next year. This time I'll bring my own camera.

The MLS and the client

Let me take a moment just to explain how I see the MLS in relation to the client.

First off our local MLS is owned by our local Association (KGVAR). That does mean in this case that one has to be a Member of the KGVAR to have access to the MLS. The Multiple Listing Service (MLS) is a handy tool for Members. When a client signs an employment agreement with a Member of the KGVAR, the client has an option to have their listing appear in the MLS for all the Members to view. That's right it is still an option.

However the MLS is still a very intelligent way to advertise a property listing. While non Members of the MLS can't have full access to the data, through the MLS data those non Members can still happen across listing information via the IDX data stream. One may notice these listings at REALTOR.com, my website, or other advertising avenues. Usually you will see a photo of the home, the price of the home, and other information such as size of property and bedroom information.

That's all good because we have been told for many years that buyers begin their search for property online. And agent or even an unrepresented seller can manually list their listings on other search mediums like Google Base, Yahoo Real Estate, and Trulia.com. However not every potential property buyer goes to each non MLS site to search because there are so many of those.

The crux of all of this is in order to place your listing on the MLS, there has to be an offer of compensation to the buyers agent. In other words, it will cost a certain amount of your proceeds to place the listing in the MLS. Now many think that offer of compensation has to be half of the negotiated listing fee. For example, many brokers charge a 6% listing fee and half of that 6% gets paid out to the buyers broker (think 3%). But it doesn't have to be that way at all. You as the property owner can negotiate that amount that you are offering on the MLS. Now for you it is a unilateral negotiation for the most part. If you say that you'll only pay a flat fee of $2500 when 3% of the sales price could mean $5000, you may not get alot of response from the real estate professionals. Again the key word there is may.

Agents should not only show buyers homes that pay them the most amount of dollars, but we are all human and sometimes that human nature thingy takes over. Keep in mind right now that there are many more listings on the market than there have been (probably ever in this market), and to separate your listing from others you will want to think about perhaps increasing the amount of compensation offered on the MLS.

Perhaps offer 3.5%. But that does not mean you have to pay a higher total amount of fee's. You could still perhaps settle on a 6% fee with your listing agent and tell the listing agent that you want to see the split be 3.5% for the buyer broker and 2.5% to the listing broker. Now, I will tell you that there are brokers that will not want to play that game. So contact another agent that might be willing to do so (like me).

I explain to my potential listing clients how compensation works. That there is basically three components to compensation. I'll explain that in another post on another day. For now though, I hope you'll have a better understanding of the MLS. Leave a comment if you have further questions.