I have just completed the first quarter sales numbers by individual broker office. In the past I have brought to your attention the steady penetration into our market of out of area brokers selling your inventory. This discussion is usually met with complacency or circular reasoning that it is in the best interest of the seller to garner exposure in multiple markets. Whether this is true or not, I’m not sure. In my opinion the jury is out. The fact is as follows. From 2005 through the first quarter of 2010 over one-half billion dollars in commissioned sales has gone to out of area brokers. Below is a breakout you may find of interest. With the economic climate our industry is in I can’t help but to think, Its My Money! Or at least it should be.
2005 $126, 484, 132 Market Share 4.7%
2006 $135, 491, 894 5.5%
2007 $ 152, 560,864 6.9%
2008 $110, 135, 166 6.97%
2009 $97, 595, 009 7%
2010 $19, 377, 160 7.9%
Total $641, 644, 225
Sandy,
ReplyDeleteThis is good info, but how does one define "Out of Area" brokers?
For instance, I have agents from the Bronx to Albany in NY and throughout CT. Since I belong to the local MLS for those areas and my agents are local to the area they service, I consider us to be local, but there is only one Corporate Office centrally located here in Dutchess.
I believe the day of having to have a Brick and Mortar office in each town are finished. Technology simply allows us to operate so much more efficiently today.
Lawrence "Larry" Jensen
Principal Broker ~ NY & CT
St. Lawrence Properties, LLC
As we know, the real estate industry is competitive. Listing agents should embrace as much activity as possible on their listings, which is in the best interest of the seller. If you want to compete to get both sides, its best advised to readjust your marketing to earn the business of those buyers coming from out of the area.
ReplyDeleteTo fully serve your buyer-clients, and as you build a relationship of trust with them, an agent might consider showing them properties out of your market area as well. Of course there is a breaking point of effective vs in-effective when you don’t know enough about those newer territories. Bottom line: The money is only yours when you work for it!
I think a lot of the increase is due to the fact that more Dutchess agents are now members of WPMLS and posting their listings in both mls systems. It's giving their listings more exposure to the southern agents who are coming up. In the past, these southern agents only had access to a limited number of listings so fewer sales took place. It's a double edged sword. Listings may sell a bit faster and possibly at a higher price, but the selling agent may be from out of the area.
ReplyDeleteDon Mituzas
Geri,
ReplyDeleteYour comments are noteworthy and your ethical, professional standards and devotion to your clients, to my knowledge, are respected by your colleagues. However, our industry is always in a state of flux and again the paradigm has shifted.
According the NAR statistics better that 85% of the public searching for homes use the Internet. They qualify the properties of interest before engaging a real estate broker. I agree that in the past it was essential for brokers to expose their listings in many different MLS’s. The market conditions necessitated the practice at an increased cost to the broker and consequently to the salesperson. Today, with most MLS’s distributing listings of their participating brokers to the major internet portals at no cost to the brokers or salespersons the past practice and cost is no longer necessary. Entering your listings into additional MLS’s does not increase your exposure to the buying public only to additional brokers. If this is your goal so be it. Keep in mind you placed your listings in several MLS’s in response to market condition changes. What I point out for thought is market conditions have changed again.
In practicality this may get some pushback from homeowner’s listing their home due to their preconceived notions of more MLS’s the better. It becomes an educational process by the listing agent in the same way the agent educates the seller as to the true value of their property. I can continue on, there are other collateral impacts but this is the gist of the blog posting.
In conclusion, let me point out that in the last eight consecutive months the number of units sold of single family detached homes has outperformed the previous years. Yet the consensus among those I speak with is they are not experiencing a better personal economic condition regardless of higher unit sales. The true bottom line is it is not what you make but how much you get to keep.
I think there should be a distinction drawn between 'Out of area Broker' and theft of services. When a principal broker or one agent of a real estate brokerage joins the MHMLS, yet allows other agents in their office access to that information, that is not only loss of commission dollars, but those agents are being allowed free access to a service the rest of us pay for. Members of MHMLS should be familiar with the rules and regs of MHMLS and know that any non member that presents an offer on your listing is not guaranteed any compensation. The compensation offered is to members of MHMLS. Agents should check with their Manager/Broker, before negotiating any offer from a non member. If your listing is posted in other MLS services, you should be aware of their policies as well.
ReplyDeleteSandy,
ReplyDeleteYour point about the effectiveness of multi MLSs is interesting. I belong to 5 surrounding MLSs services, covering a 6 county area. The reason is to best serve my clients and to provide them with not only local area exposure and/or search capability, but also to give them multi exposure through the various systems, by way of different and sometimes the same portals. Other words, not all MLSs have the same exact distribution points and marketing exposure. It’s the embarking of an evolution whereby out of County brokers belong to our local MHMLS system, and thus we belong to out of County systems like WPMLS, CCMLS, UCMLS, GHVMLS, and so forth. Again, it begs the question: what is considered an out of area broker? Instead of competing with local area brokers for business, an agent must be willing to compete on a broader scale in order to earn business and sustain on the long run. The Internet has been instrumental in expanding our services areas, by way of public demand and access to broader territories. Being an isolationist can be a handicap to the bottom line.
Christine’s comment is a valid and real issue, as the market is more competitive and the economics have not been so favorable for some, I am running into brokers… well respected small shops that don’t think twice about loaning out their IDs and their keys to non-member agents within their offices. We have systems in place that cross reference showing agents to the MLS systems and DOS licensing records. We have a duty to specifically inform our sellers of any incidents of key sharing within an office that is requesting to show our properties. Co-broking is allowed with authorization by our clients, but key sharing is another story all together, and our clients are made aware of those incidents when they happen so they can decide how we should proceed. The Board controlled MLSs have written policies and requirements of member corporate brokers attesting that those non-member agents within their offices will not violate the MLS rules of sharing codes and access; otherwise they are kicked out of their MLS system. When I see this happening, I cringe for a numbers of reasons, 1) because of lack of ethics and nonchalant attitude, and 2) the incredible liability and risk the corporate broker is willing to take. In order to make money, you have to spend money, including investing in the tools necessary to service your clients. If non-member agents cannot afford to invest in other systems, yet want to take listings in those new territories, the sellers would be best served by passing your business onto member agents within or out of your office by working out a referral fee or barter arrangement instead.
Geri DeWitt Ruby
Corporate Broker
RE/MAX Moniesworth Realty
Servicing the Greater Hudson Valley for 30 Years
The seller could care less where the buyer comes from. If a buyer from southern Westchester chooses to use his cousin who is an agent to represent him to puchase a home in Dutchess, so be it. It may or may not be the best choice for that buyer, but that's not a decision that I can change. The seller wants the most exposure and the most buyers looking at the property in order to obtain the highest and best offer.
ReplyDeleteEvery agent in this mls has the same opportunity to earn a commission and sell a house. No one's commission is going anywhere it shouldn't.
This speaks volumes about a regional MLS. Right now I belong to 3 MLS services and use all three on a regular basis.
ReplyDeleteNancy Keller GRI, ABR, SFR