We have been taught in business that referrals are the most reliable way to find a professional, and we have been taught for decades that the best source of business is referrals from happy clients or friends or business acquaintances.  And that has been the teaching in the real estate brokerage business, at least it used to be.

Referrals are still an important source of business, and a referral from a credible person to a truly professional Realtor who knows what they are doing, has vast experience, is using effective marketing techniques, has integrity, and so on, would be an example of the rule that referrals are good.

But more and more referrals in the real estate business are turning out to be a curse rather than a blessing.  What do I mean?  There’s nothing like a true story to make the point.

I got a call from a gentleman who showed me his house many months ago.  He and his siblings had inherited the property, and it is a very special property.  He really believed in what I am doing in terms of marketing, and he appreciated my 20 years experience as a real estate attorney and my many years in real estate sales and how I am reaching buyers from outside our area on the Internet.  But heirs always have to work together in listing and selling a property, and while he may have felt I was the Realtor for the job, he had a couple of siblings from outside the are who had not met me, but who had received a referral to a “traditional real estate broker and agent.”  Understandably, they wanted to go with this credible referral.

After months of “nothingness,” all of the siblings agreed that their traditional agent was not the great referral they had thought or hoped.  The comment was that the agent put the listing in the MLS and then did virtually nothing.  I cannot tell you how many times I hear that same complaint, over and over again.  I would not write about this if so many people did not keep getting hurt (a delay of many months, especially past the selling season, can cost a seller a lot of money and stress).

What I do to market a property effectively is so much more, but that is beyond the scope of this short article.  The point here is that referrals are not necessarily reliable these days when it comes to real estate agents.  This story I’ve shared is not an isolated story.  There are many more stories just like this.

A gentleman called me to ask about a listing I had, which he had made an offer on through his own agent.  I immediately explained to him that I cannot talk to him as he is represented by his own buyer’s agent.  He was very kind and responded that his own agent was making a mess of things, including his own offer, and that was frustrating to him.  I told him I still must ethically ask him to work through his agent so long as his agent represented him.  Before we hung up, he volunteered that his agent was referred to him by a trusted friend.

While referrals to good real estate agents used to be a simple matter, it has dramatically changed as the real estate market has changed, as marketing has changed, as old media is collapsing, and as Realtors have had to re-invent themselves.  But the traditional brokerage is almost outmoded, which reminds me of print newspapers which are going out of business all over the country.  What is traditional real estate brokerage?  Here’s an interesting bullet list from one author.

• A real estate company that focuses on it’s brand more than the consumer.
• A real estate company that is highly leveraged with office space and expensive leases.
• A real estate company that hires agents blindly creating a revolving door that can damage the brand on which they are spending so much money.
• The real estate company that continues to make promises to it’s agents that it can’t deliver due to corporate bureacracy.
• The real estate company that decreases dollars spent on the consumer in an effort to maintain profit due to high overhead.
• The real estate company who is “trapped in the box” with no ability to truly see “outside of it.”
• The real estate company that defends a 6% commission while providing less service than it did 10 years ago.
• The real estate company that claims to embrace change all the while avoiding it like the plague.
• The real estate company that talks the talk but resists walking the walk.

Fascinating list, isn’t it?  This comes from an article entitled The Traditional Real Estate Brokerage Model is Broken.

Conclusion:  Accepting a referral to a real estate agent from someone today is not much better than picking a name out of the yellow pages (wait, who even uses the yellow pages anymore?), unless . . . the person referring you to that Realtor can speak from a deep foundation of knowledge about that Realtor’s experience and knowledge AND about their effective marketing techniques.  If they cannot do that, you are better off, in my humble opinion, doing your own due diligence to find the best Realtor you can find.

Possibly Related Posts:

• Wanted: New Sequim and Port Angeles Real Estate Agents
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• The Case of the Disappearing Realtor
• Sequim Real Estate Broker Creates Massive Internet Brokerage
• Finding a Real Estate Agent Who is Good

True story.  Buyers arrive from the hot south to look at homes in the Sequim and Port Angeles area.  They’re excited about retiring on the Olympic Peninsula, and enjoy looking at homes with a broad range of features and prices.  After spending time with their Buyer’s Agent (that would be yours truly), looking at a number of potentially great homes, the list is shortened to . . . “the one.”   It’s no small thing to find “the one” in this life.  We start that search early on.  Grade school girls begin searching for “the one” out of ignorance, thinking that there really is a guy out there who is perfect.  High school boys commence their search for “the one,” only it’s not a girl.  It’s a beautiful car with loud mufflers.  Hollywood even made a movie about “the one” and called it the Matrix.

Perhaps for retirees who have been down the road of life a little further, experienced some of the bumps along the way and had a few flat tires, moving to Sequim or Port Angeles to retire and find the ideal home is not so much about searching for “the one.”  Retirees have the advantage of a lifetime of experience and no longer wear rose-colored glasses.  Reality replaces fantasy, and one comes to realize there is no such thing as “the one.”  (Sorry, Keanu Reeves.)  What retirees do have is wisdom and rational thought, common sense built on a lifetime of solid experience.

So when the buyers from the hot south decided to make an offer on said home, aka “the one” in this story, they first inquired with their Buyer’s Agent at the county building department as to the date the home was built and other details about the construction and permits issued.  Alas, truth is stranger than fiction, and that is true more than once in this story.  Our good buyers found out that said home is completely illegal, never had a building permit issued, nor are any of the outbuildings permitted.

As my mother used to say, “Oh my!”  I suppose there are more popular colloquialisms that might be uttered, but not by me.  (I have no idea what those words would be.)  After much discussion with the kind county officials about what would have to be done to make the home legal, it was apparent that there would have to be thorough inspections from the crawl space to the peak of the roof, including concrete, frame construction, roofing, insulation, wiring, and on and on.  The bottom line is that the building department would issue a building permit if the owners went through the entire application and permitting process and proved all of the construction, electrical, plumbing, etc. complied with the building code.  The house would have to be inspected by engineers, electricians, carpenters, roofers, and probably by my mother.

Walls would have to be ripped open for many of these inspections, framing would be examined for code compliance, nails have to meet minimum specifications, flooring and carpet might have to be pulled, concrete bore samples may be necessary to prove the concrete will meet pressure requirements and has sufficient rebar, and so on.  You get the idea.  The cost would be exorbitant, and there is absolutely no guarantee that the county would issue a building permit and occupancy permit.  This home turned out to be an extraordinary disaster, and why someone would do such extensive construction, build a custom home with absolutely no permits, is really an amazing thing in 2010.

As the annoying late night commercials used to say, “Wait, there’s more!”  If you aren’t already shaking your head in amazement, as were these buyers and yours truly, imagine our amazement when we figured out the seller had never disclosed any of these things to his listing agent.  The fist time the listing agent heard the house was unpermitted and completely illegal was when I told her.  As the cell phone texters like to say, “OMG.”

What would you do if you were a buyer in this situation?  (I know you’re thinking “run.”)  The intelligent and reasonable buyers in this story who happened to be my clients (I always get the most intelligent and reasonable clients), decided to make an offer at a lower price that was well within reason, considering the circumstances, and they also required the seller to prove to the county that the home had been built to meet the requirements of the building code.  Not unreasonable at all, right?

Ah, but remember, truth is stranger than fiction (and this is the second time that is true in this story), and so the sellers (or was it the seller’s agent/broker?) came back with a counter that wanted the buyers to pay nearly full price and . . . no permit would be obtained by the sellers.  In other words, the seller (or was it the seller’s agent/broker?) was saying, “Buy this house that is completely illegal with no permits and which could be red-tagged because no occupancy permit has ever been issued, at full listing price (which is far above the fair market value for an illegal home that cannot be lived in . . . legally), and by the way, we’ll throw in the washer and dryer.”

Does the word “insanity” come to mind?  Or perhaps “irrational” is better.  Or “unreasonable,” “ridiculous,” or “unbelievable.”  The counteroffer was so extraordinarily ridiculous that my clients used the word “Saturn” to describe where the sellers must live.

This kind of negotiation can happen when one of two things happen, and they can happen independently or together.  First, a seller may actually be from another planet, which is to say they may be completely irrational.  Second, the seller may have an agent (or broker) who is completely irrational.  They make those kind, too.  If either or both are true, move on.  You cannot negotiate with someone who has both feet firmly planted in thin air.  There are many other homes, and most of those homes are owned by rational human beings who . . . actually got permits when they built their homes.  What a novel concept!

How did my clients respond to the counteroffer from Saturn?  They said, “Oh my!”  And then they decided to move on.  They had no interest in trying to negotiate with citizens from another planet.

Possibly Related Posts:

• The Curse of a Referral: Referrals Are Supposed to be Reliable
• Wanted: New Sequim and Port Angeles Real Estate Agents
• The Future Real Estate Broker
• Who is this Sequim Realtor?
• The Case of the Disappearing Realtor

Sequim and Port Angeles Real Estate (branch office of eXp Realty) is hiring new agents who want to be trained and mentored to be top producers.

1. Training and mentoring at entirely new levels
2. Broker is a 20-year real estate attorney (ret.), successful Realtor and top producer, author of two books and thousands of articles
3. Cutting edge technology and Internet marketing
4. Part of the most powerful virtual Internet brokerage in the U.S.
5. 80%-20% commission splits
6. Potential to earn residual commissions
7. Work out of your home office with low overhead
8. Current office in Port Angeles and soon in Sequim
9. Online 24/7 training by top professionals around the country
10. Virtual network with tremendous benefits
11. Only training a limited number of agents with potential to become full time top producers

Contact:

Chuck Marunde, J.D. via email (chuckmarunde@gmail.com) with a copy of your resume and a cover email explaining what you are doing now and why you want to interview for this position.  Commission only.

Possibly Related Posts:

• The Curse of a Referral: Referrals Are Supposed to be Reliable
• Who is this Sequim Realtor?
• The Case of the Disappearing Realtor
• Sequim Real Estate Broker Creates Massive Internet Brokerage
• Finding a Real Estate Agent Who is Good

The future real estate broker and the future real estate agent have already arrived, and they look a lot different than the broker or agent of the past 30 years.  It is absolutely amazing how rapid changes have hit the real estate business, but it’s not just because of the real estate recession and the economic recession.  The dramatic changes to the real estate business, which have huge implications for buyers and sellers, are really the result of a convergence of a number of major factors.

Buyers are no longer using newspaper classifieds to search for their next home.  The National Association of Realtors conducted a study which revealed that 85% of all buyers start their search for their next home on the Internet.  And guess what they are doing?  They are using Google to search for their next home, as well as free online MLS search sites.  This means that buyers are searching for their next home and filtering their list down to a practical number of homes, which they schedule to see with their Realtor long before they even arrive in town.  These buyers are not subscribing to the local newspapers, and they are not in an area where local home magazines are on the news stands.  Real estate brokers and agents know that their newspaper ads are not working, because they are not getting calls and selling those listings.  It’s not like it was years ago when the newspapers were the only way to advertise homes.

Because technology and the Internet have given buyers so much freedom and so much control over how and when they search for their next home, traditional advertising is no longer nearly as effective as it was.  This is one of the major reasons newspapers are going out of business all over the country.  Classifieds are no longer effective.  Craigslist has put a major dent in newspaper revenue, and that’s just the tip of the iceberg.  With the growth of the Internet and free consumer resources on the Internet, buyers are loving the privacy and freedom they now have to shop for their next home.  The convergence of the death of traditional media and the growth of the Internet have created a perfect storm in which traditional brokers and agents are sinking and consumers, especially buyers, are finding new freedom and power.

The brick-and-mortar real estate office can no longer put agents in cubicles and have them wait for the phone to ring or for walk-ins.  The phone no longer rings like it once did, and walk-ins are very rare.  Agents of traditional offices are leaving the business in droves.  I’ve been buying their lockboxes for half price.  That business model is not the future of real estate.

Buyers know this.  They have for a while.  Sellers have been a little slow to pick up on these dramatic changes, and traditional agents are not doing a great job educating their clients.  The way a home is advertised and promoted today to reach qualified buyers is so different than yesterday.  Granted, we will have the traditional office around for a while, and agents will continue to advertise in newspapers and magazines, but not because it sells homes like it once did.  Agents all over the county and the country tell me the only reason they put their listings in the Sunday newspapers is because their clients expect them to.  That’s just plain dumb.  Why not educate clients and stop wasting money and time on advertising that is not effective?

The real estate broker of the future and the agent of the future is going to be so different.  They will use the Internet and the most powerful technologies to reach buyers and sell homes.  The future agent will be engulfed in cloud computing and digital document management in a paperless office.  He will use the best ways to connect sellers with buyers, and the best CRM (customer relationship management).  This future will also network some of the best real estate agents around the country in entirely new ways to create a brain trust and training and mentoring that brick-and-mortars only wish they could have.  The old ways are fading rapidly, and the real estate business of the future is here.  I’m loving it, and I’m thoroughly enjoying connecting with buyers from all over the country using these technologies.

Are you taking advantage of these technologies to market your home?  Is your agent connected with the most powerful Internet technologies and business model today?  Ask me about what I do and how I do it?  You might be surprised.  You can start by digging around on this blog.  You’ll fund almost 700 articles written by me about Sequim and Port Angeles real estate issues–almost any real estate issue you can think of is here.  You’ll find the most powerful and easy-to-navigate MLS search tools here.  All these tools are free and require no registration.  You’ll find educational videos produced by a 20-year real estate attorney and broker.  You’ll find audio recordings on a variety of real estate issues I call Traps for the Unwary.  You’ll find a free FSBO eBook download, and you can download the Introduction to my upcoming book, Buying and Selling Real Estate in the Rain Shadow.  In other words, you will find this is a content-rich site, but this is just the tip of the iceberg.  There is much more behind the scenes to serve my clients in new and powerful ways.  You might guess that my real estate office is a virtual office–the real estate brokerage of the future.  Only this office is here today!

Possibly Related Posts:

• The Curse of a Referral: Referrals Are Supposed to be Reliable
• Buyer’s Offer Countered by Seller Living on Another Planet
• Wanted: New Sequim and Port Angeles Real Estate Agents
• Who is this Sequim Realtor?
• Real Estate Brokerage is Changing Rapidly

Who is this Sequim Realtor?  He was a Captain in the USAF during the first Kuwait war and stationed at Nellis AFB near Las Vegas.  He loved running 15 miles across the desert at 100 degrees, and became a lover of nature photography.  He left the Air Force to work in Prison Ministry, and then moved to Sequim where he finished his career as a lawyer.  He raised three boys and a girl, and two of his boys became professional athletes.  Today he is a Realtor and author, and claims to be an Internet geek.  Who is this skinny geeky looking guy?

He is Chuck Marunde.  “I look a lot different now, mostly because I don’t have all that hair.  Frankly, I’m glad, because I save a lot of money on shampoo.  Those glasses I wore  sure were huge, too.”

Possibly Related Posts:

• The Curse of a Referral: Referrals Are Supposed to be Reliable
• Wanted: New Sequim and Port Angeles Real Estate Agents
• The Case of the Disappearing Realtor
• Sequim Real Estate Broker Creates Massive Internet Brokerage
• Finding a Real Estate Agent Who is Good