BrokerBryant.com: December 2009

Hi folks. We are quickly closing in on 2010.  With that in mind I am writing this post to give you a very simple way to achieve your financials goals for next year. First I want you to punch your numbers into this chart. We are looking for how much GFI (Gross Commission Income) you need to meet your financial obligations based on the lifestyle you want to live.

The amount of GCI (Gross Commission Income) needed is $117,500. So how do you get there?

• Average sales price in your market area X the average commission X your % split=Your ADPT (Average Dollar Per Transaction).

• GCI divided by ADPT divided by 12=How many transaction you need to close per month.

• Active Listings in your Market divided by Listings Sold Per Month=How many listings you need per sale X transactions you need to close per month= How many saleable listings you need to maintain.

The math based on the numbers in my example would be:

• $125,000 X .0275 = $3,437 X .70 = $2,406 (ADPT)

• $117,500 (GCI) / $2,406 (ADPT) = 49 / 12 = 4 (need to close per month)

• 600 (Active Listings) / 100 (Sold per month) = 6 X 4 = 24 (Saleable Listings)

Based on this example you would need to maintain 24 listings at all times and would need to list 4 a month. Throw in some Buyer deals and you could have a fairly decent year.

The point of this exercise is to show you how to lay out your financial map so you can make sure you are meeting your obligations with ease.

A final tip:

There are only three ways to increase your GCI.

• Increase the number of units you sell.

• Increase the sale price of the units you sell.

• Increase the fees that you charge.

Does this help?

Do NOT be foreclosed on! Avoid foreclosure. Short Sales DO close.

Want to find out more? www.CentralFloridaShortSales.com

Copyright © 2009 http://www.brokerbryant.com/ | All Rights Reserved

OK before I get started let me say that I know from experience that most REALTORS® are good hardworking trustworthy folk. BUT…….not all.

As in any profession there are wolves in sheep clothing. You may think they are looking out for you when the reality is they are just looking out for their wallet.

Recently I have had agents on the other side of the transaction literally crying and begging for me to get an offer accepted because they needed money for Christmas. I would like to say I was shocked but I wasn’t.  In my 15 years of being a REALTOR® not much shocks me anymore. Agents begging to get paid is quite common.

What am I, as the representative for the Seller, supposed to do with this information? Keep it as a secret (professional courtesy) or tell my Seller and use it to  our advantage? What do you do?

Folks this is a big deal. Why in the world would an agent, I don’t even know, give me this information? I’m a Broker for Pete’s sake!! Don’t they know I am going to use this information to help my customer/client get a better deal?

I know for a fact that one recent Buyer paid several thousand more for a property and is paying a higher interest rate on an owner financed deal because their REALTOR(R) was desperate. We countered accordingly knowing that the other agent would “sell the deal”. And they did.

How often does this happen? Are you a desperate REALTOR®? Are you costing your customer/client money because you need a paycheck? I hope not. What say you?

Do NOT be foreclosed on! Avoid foreclosure. Short Sales DO close.

Want to find out more? www.CentralFloridaShortSales.com

Copyright © 2009 http://www.brokerbryant.com/ | All Rights Reserved

***Photo by manitou2121

This discussion has been taking place on AR since it's inception.

Some of my favorite responses are:

• I don't even look at that until I'm writing the offer.

• We should never put our own self interests ahead of our clients.

• I show my buyers listings no matter what the co broke is, as it is our duty to our clients to show listings that fit their needs. 

My question is....Why are agents so afraid to admit that commission does matter? What aren't you having these discussions with your Buyers PRIOR to them agreeing to hire you. How many of you, that say commission doesn't matter, go out of your way to find your buyers a FSBO? Or do you only show it if your Buyer ask?

Well I know I'm not alone when I say I want to be paid for my services. And I want to be paid fairly. I won't work for peanuts. AND....my Buyers WANT me to get paid.

If you are so unconcerned about your commission then how do you handle your listings? Maybe it goes something like this........

"Hi Broker Bryant. We saw your ad in the paper and would like to list our property with you."

• Excellent!! I'll be right over.

So, I head over and give them my little spiel and they want to list with me.

• OK folks sign here and here and I will get your property up and running on the market.

"But Broker Bryant.....how much do you charge?"

• Folks, I am bound by the REALTOR® Code of Ethics that states:

"When representing a buyer, seller, landlord, tenant, or other client as an agent, REALTORS^® pledge themselves to protect and promote the interests of their client. This obligation to the client is primary"

• Since your best interest is getting the property sold with the least costs to you I will leave the commission up to you. If I didn't do this I would be putting my interest and lively hood ahead of yours and would be in violation of our CoE. So just pay me whatever you want.

"Well that sounds great Broker Bryant!! You're the bomb!!"

• Yes, I am. Commission does not matter to me at all. I'll gladly work for free if it is in your best interest. That why I'm a REALTOR®. Make sure and tell your friends too.

"But Broker Bryant....don't we have to offer the other agent some money to show and sell our property."

• Yes I'm afraid you do. Our MLS will not allow a property to go into the system unless we offer the selling broker compensation.

"How much do we need to offer?"

• Well folks remember the other broker will be a REALTOR® too and is bound by the same CoE that I am:

"When representing a buyer, seller, landlord, tenant, or other client as an agent, REALTORS^® pledge themselves to protect and promote the interests of their client. This obligation to the client is primary"

• So why don't we just offer them $1. Most REALTORS® don't look at the commission anyway. They just want to get the best deal for their Buyers. The co-broke doesn't really matter. In fact, if they don't show your property we can bring them up on Ethics charges.

"Broker Bryant....we are soooooo glad we called you. You have far exceeded our expectations. No one has ever explained your ethical duties like this before. We'll be sure to send you lots of referrals!"

• Thank you folks!! It sounds like my job here is done!!. Before I leave can I borrow a fiver to pay for my gas home? THE END.

Sounds foolish doesn't it? Well if you feel we have to show every property regardless of the co-broke then this is exactly what you are implying. Or does your incorrect interpretation of the CoE only apply to Buyer Brokers?

If you are telling your Sellers that Buyer Brokers must show their property regardless of the co-broke you are harming them and in fact may be in violation of the CoE. And if you are telling them that Buyer Brokers, who do not show their property, are acting unethical and illegally then you are wrong and may very well find yourself in front of an Ethics Committee.

But, by all means, if you CHOOSE to show all listings, regardless of the co-broke, you are free to do so. Personally, I think you are fooling yourselves. It is your business though. Just know that you do not have to do so. Of course, you do need to have this conversation with your Buyer.

Food for thought?

Posts by Broker Bryant about Buyer Broker Agreements.

Do NOT be foreclosed on! Avoid foreclosure. Short Sales DO close.

Want to find out more? www.CentralFloridaShortSales.com

Copyright © 2009 http://www.brokerbryant.com/ | All Rights Reserved

Hi folks. Short Sales. Why do I spend so much of my time messing with these things? Isn’t it true most people are just doing them to avoid honoring their promissory note? They borrowed the money they should pay the mortgage. Deadbeats!

I closed on a Short Sale a few months ago. The Seller had owned the house for 27 years. It was the retirement home for him and his wife of many years. After 30 years of hard work they were finally able to retire and move to Florida, pay cash for a home and enjoy their twilight years together.

All went according to plan for 20+ years. Then one day Mrs. Seller was diagnosed with cancer. After several years of surgeries and treatments she finally had to be sent to a nursing home. Her husband, now almost 80, could no longer take care of her.

Mr. Seller was forced, by high medical bills, to place a mortgage on their home for $175,000. Less than 2 years later the money was gone and tragedy struck again……Mrs. Seller died.

Seeing his wife of 55 years suffer was just too much to handle. Mr. Seller, distraught, had a stroke. He too had to be admitted to a nursing home. He was 82.

Through all of this Mr. Seller still hung on and continued making mortgage payments. By the time I was contacted to help sell the property the value had dropped to $73,000. Instead of continuing to throw good money after bad he decided to go forward with a Short Sale. Deadbeat!!

I mess with Short Sales because real people need me.

Do NOT be foreclosed on! Avoid foreclosure. Short Sales DO close.

Want to find out more? www.CentralFloridaShortSales.com

Copyright © 2009 http://www.brokerbryant.com/ | All Rights Reserved

Recently I was asked “How will property values ever come back up if the appraisers keep discounting values for the declining market and the cash Buyers want the lowest price possible?”

The answer of course is…..get the Lender out of the equation. No Lender. No appraisal needed. Higher sales price. What you talkin’ bout Willis?

Let me explain. REOs and short sales still dominate the market in my area and are still bringing values down. What’s strange about this is the fact that inventory is very low and sales are at an all time high but values are still being depressed by…….Lenders. 

So…the “No Qualifying Owner Financing” is making a comeback. Investors are realizing that Buyers will pay a premium not to have to deal with Lenders. And the Investor can get a much better return on their money by holding a mortgage than they can renting the property out.

In fact, in my market, you can expect to get 10% to 15% more for your property if you’re willing to “hold paper”. How do I know this? Because my sellers are doing it.

Here’s an example of how this works out for a Seller.

Seller paid $85,000 cash 4 months ago. The intent was to rent it out for $1,100 a month. After expenses he would net about $750 a month. After 5 years the property may be worth…….well we don’t know do we? We do know if it were rented with no vacancies and no repairs (like that will ever happen) he would have received $45,120 in income. Roughly a return of 53% over 5 years.

Instead, what if he sold it for $120,000 with $25,000 down @ 8.75 with a 5 year balloon? By the way this property would appraise for $110,000 to $115,000 right now. It was purchased right because my buyer made offers on 14 properties at the same time. He ended up getting a deal on this one,

OK back to my example. With Owner Financing the payment would be $750 a month (same as the Net rent). After 5 years the balloon payment is $91,000 AND he would have received $41,500 in interest payments. $25,000 + 91,000 + 41,500=$157,500!! This a profit of $72,500 or a return of 85%. Roughly 30% better than renting AND he doesn’t own the property which means no maintenance or management.

Now folks these figures are not exact but they give you a real good idea of how owner financing works for the Seller.

And the Buyer? Well they can get a good house with a non qualifying mortgage and very minimal closing costs. It’s a win all the way around. The only loser? …Lenders!!

What say you? 

Copyright © 2009 http://www.brokerbryant.com/ | All Rights Reserved