Realities of the Real Estate Business

Read this stuff - My 24+ years of knowledge in this business is very valuable, but you have to take time out to read!

Did you know that over 1000 properties do not sell (go off the market) every month in the Bay Area? I seek out/find a lot of these Sellers and they even call me to re-list their properties! I turn their stories into success stories.
 
With approximately 50,000 real estate agents and brokers in the bay area seeking your attention and business, it is very difficult to get to the truth - it's actually mind-numbing! Thousands and thousands of ads!
 
I just do the opposite of what they do. You won't see me in any newspaper or magazine or open house, because I don't need to be, and I am more successful for it. Look how many "large" real estate companies have merged/folded in the past 10 years - dozens! I am NOT in the business of managing agents. I list and sell real estate.
 
Most agents and brokers are part time, and NONE are employed. They're all self-employed independent contractors, and 100% responsible for their own business and results, not their company. Their productivity (leads for listings and buyers) are not given to them - they must earn every single transaction from start to finish. They must use their mind and feet quickly and have a plan. But most agents don't even have a plan!
 
They start out highly motivated but after 6 months they either leave the business or rely heavily on friends and family for business. This is called having a "sphere of influence" - hardly what I call a business!
 
I have unique target marketing plans, which consist of using my own computer programs to get my work done. The bottom line is that I get in front of the "highest probable/qualified" buyers and sellers. Compare this to the average agent who simply just passes out their business cards to everyone they meet and/or just waits for the phone to ring and/or waits for someone to show up at an open house and/or walk in their office's front door. That's not what I call a controllable business. I like to control my business, so I go after it - on the road!!!
 
This Bay Area market, which has the highest median priced homes in the nation (over $400,000), is one of the most competitive marketplaces in the world. So, you can appreciate how real my business is when you look at my track record!
 
With my mobile office, I can serve people more quickly and efficiently - in effect, bringing the market to you. I am 100% committed to bringing you the data, professional knowledge, advice and experience in one package. After all, this is your most expensive investment. Do it right the first time!

The business of Real Estate Marketing and Sales has changed dramatically in the last 5 years. For as long as real estate agents have been around, buyers and sellers have chosen an agent they knew from a friend or relative. But now with the internet, consumers like you have the power to find out who really is the most qualified broker to help them achieve their goals.

This is sad... Most people do NOT know what to look for in a Realtor, so they just pick one with little research. Plus, everyone looks for different things in a Realtor. One look at my track record and nothing else needs to be said.

"Doing it right the first time" means different things to different people

For Buyers: Finding the right property quickly/buying it at the right price/closing the escrow smoothly.

For Sellers: Marketing their property quickly/selling it at the right price/closing the escrow smoothly.

Let me get specific: I know the details of the "who, what, where and when" of over 16,000 buyers' and sellers' plans throughout the Bay Area. This isn't overwhelming to manage, because over time, this huge number equals just a few hundred prospects every month. Some change their minds. For those that still want to move, I can easily serve them and more. I always say "I need more listings!"
 
To get started, Sellers must sign an "Exclusive Authorization and Right to Sell" (a Listing Agreement) and Buyers must remain loyal to me (verbally commit to me). I do not require a Buyer-Broker Agreement.
 
A two-way commitment (working together) is critical in being successful. Why? ....
 
This business requires a lot of sacrifice - long days/nights and weekends -
 
Make it count and remain loyal to me!
 
The Real World of Real Estate Sales, Marketing and Finance!
 
I am an independent broker because it allows me to...
Implement new creative marketing ideas and services that work better than other agents', thereby helping more people and increasing his income. So why isn't every agent independent? After all, all real estate people are independent contractors, not employees!
  1. What about large franchises and offices: Each agent is in charge of procuring his/her own business and the marketing and servicing thereof. There are no employed agents. This means that the agents inside an office do NOT work together for the same clients, as you are led to believe by huge advertising campaigns that tote "We have the People, Resources, and the Power." This is nonsense.
  2. Each agent is responsible for paying for their own resources, including computers, software programs, subscriptions to data, information, service-oriented assistance, utilities, signs, etc.
Examples: How many have a laptop? How many work in broad-reaching areas? How many subscribe to the Big 8 companies (All of the Bay Area MLS computers, County Assessor's database on CD-ROM, etc)? How many have a real marketing plan and solutions to sellers' and buyers' real problems?
  1. How about Relocation and Referral leads from all those thousands of agents that belong to national franchises? These "network" agents rarely market or show properties - they just receive referral fees from simply making some phone calls around the nation referring buyers and sellers to other agents. Is that the kind of agent you want? No practical experience means a dangerous potential of receiving incorrect advice. In a few short years, there will no longer be any loyalty among agents belonging to franchises regarding where they send their referrals - The internet is already allowing me to automatically receive referrals based on my ability and experience, not my company affiliation.
Example: I was savvy enough to secure this URL, sfbayrealty.com - before anyone else - this name alone procures more referrals than any franchise could ever hope to bring in.
 
In any case, these kinds of leads are an uncontrollable resource - and for you, sellers, it is a false marketing tool agents use in an attempt to list your property - making it appear you have thousands of agents working for you across the nation or in their large office to sell your home. That's baloney.
  1. Power. "We have the Power." What are they talking about?! Most agents WAIT for business to come to them - for a phone call, a walk-in to the office or an open house. These are absoluetly ancient and totally poor ways of procuring business, but this continues today. Also, most agents are part time, meaning they only work within their "sphere of influence" - friends, family, and people they meet. If you want real power, select a broker like me who does the exact opposite - I go out and get the business instead of waiting for it to come to me.
  2. Big Company Name. Agents hide behind a big company name because they have no unique marketing plan other than being with a big name!
    Name recognition means very little today in Buyer’s minds. Actually, it hurts more than it helps, because if someone has a bad experience with a company, they’ll not use that name again wherever they move to. Buyers just want to find the right property with the right price and terms anyway.
  3. Track Records. Agents need camaraderie with fellow agents (and their track records) - because all sales under one office can be used by any agent therein to make it appear they themselves listed and/or sold the sum of all the office properties. - even though they weren’t involved with the transaction! Just being a licensee under a Broker’s office entitles agents to claim all the sales as theirs.
  4. Ads and the Media. They make it appear that advertising and a large presence in the media will bring them business - and it does - actually, - the image of all those ads is impressive, but unfortunately it brings ambiguous leads which cannot be controlled. These ads do make the phone ring, but the buyers usually end up buying another property - in any case the buyer’s agent will turn to the MLS computer immediately to show the Buyer how many other homes are for sale, and start showing homes at that point.
  5. Open Homes. Like ads, they cannot be controlled. That is, an agent is at the mercy of whoever is driving by and or reads the paper. (70% are drive bys). Agents only have one other way of procuring Buyers - referrals...
  6. Broker’s Tours or “caravans” - These are very unlikely to create more showings - mostly new agents go on these, to learn about the area.

If these don't work, what does? The objectives in listing & marketing property are.

To procure a qualified Buyer to purchase your property
at the highest price
within the time you want
with no problems or delays during or after close of escrow

Location is #1 in real estate - that's why I am mobile - to get to the location first where and when buyers and sellers make the decision to market or purchase real estate. Meeting buyers and sellers where they are most likely to be - at the subject property. If there is need for an office, there are no less than 60 offices throughout the Bay Area that I can use, including Title company offices, 24 Hour Kinkos offices.

 
99% of my listings sell at 99.7% of the listing price within 21 days on average - all over the bay area - regardless of price range, area, time of year or market conditions. My track record since 1982 proves this. Return to the top of the page.

I recently listed Anne Manley and Michael Drum's home at 3922 Harrison Street after Pacific Union tried to sell it for 3 months. Within two weeks I sell their house at full price, which was higher than Pacifric Union had it listed for. And the market values were NOT escalating at tthat time. But behind the scenes, here’s what happened: While interviewing, other brokers told Anne and Michael that the home’s value was wayy lower than what I advised tthem of. Throughout the escrow, the Buyers requested additional credits from the Seller after their physical inspections, and I told my client, the Sellers, to stay firm and say “no.” The Buyer proceeded and it closed on time. These clients were extremely attached to this house, because it had been in the family for over 60 years. So they were extremely relieved and happy that I took the time and fortitude to do what was right.
Step #1: Advising and consulting on list price, sales price, projected time to sell, determining current market value Review “comps:” color photos, maps, descriptions, locations, conditions, size & amenities, terms, credits, motivations. The list price is so critical, I estimate 80% of my listings sell at full price within 3 weeks just because of this alone.
 
Step #2: Finding the highest probability Buyers instantly: 1) Obtain list of Active, Pending and recently Closed homes in strategic areas and price ranges; convert text file from MLS into database format including owner names, addresses, phone numbers, listing agent name+e-mail address, list price, loan balance, listing date. 2) Send brochure to seller, listing agent, 3) Prospect on phone, 4) Send e-mail+brochure to listing agent. The second best way to obtain a good list of buyers is to refer to my database, which I will show you in person.
Just take two of the 7 counties where I market homes: Alameda and Contra Costa County. It is only from this wide-ranging experience that I know where “Buyer migrations” are taking place. For example, Oakland, San Leandro, Castro Valley, Hayward Sellers are Buying in the Amador and Southern Diablo Valleys. West Contra Costa and East Bay Hills Sellers are Buying in the Lamorinda and Northern Diablo Valleys.
 
Step #3 Qualifying and Pre-Approving Buyers. I also “do loans.” I offer full mortgage brokerage services, and even if the buyer does not use me to obtain a loan, I will verify the same information they provide their loan broker. See “Addendum.”
 
Step #4 Negotiating the best price, terms and conditions of the sale. We refer back to my initial research in Step #1.
 
Step #5 Policing the escrow using my Platinum Customer Service (Always Available, 24/7 - See Communications)

What? There are over 30,000 real estate agents in the bay area? Good grief! All that junk mail, all those real estate ads in magazines and newspapers! One minute there are hundreds of agents leaving the business and offices folding and merging. And NOW real estate is booming again, and here they come again. Gordon has much to say about the realities of the real estate business, but do you have time to listen? Probably not. But Gordon has hope! The main purpose of this WebSite is to be your major provider of real estate information and services. Since every person is looking for something different in a REALTOR, Gordon will

It will become self-evident that Gordon is light years ahead of all other brokers in the Bay Area. He can only handle a few transactions at a time, so There are other purposes, too - Daily Real Estate News, Your Community/Subdivision Newsletter.

There are over 10,000 licensed real estate agents in Contra Costa and Alameda Counties alone. There are over 20,000 in the silicon valley. Are they all the same? How does real estate really work? Most are part time. Gordon Allen wants you to know how real estate really works. Here are some facts about selling and buying real estate:
There's a Better Way than...
The Yellow Pages
Junk mail (or e-mail)
TV or the radio
The newspaper or magazines
Open homes
Broker Tours

WHAT? How is that possible?

Sellers - On Showings...
Listing agents only represent the Buyer 1% of the time.
This means that other agents will show your property more than the listing agent.
Gordon Allen shows his own listings often and sells them himself 40% of the time.
In general, it is not a great idea for the buyer to use the listing agent.
It takes a highly experienced and professional agent to represent both.
On Ads...
Advertising in the media and open homes don't work like they used to.
Advertising in magazines and newspapers are used to obtain more listings, not buyers.
Advertising in the media is used as an excuse of an effective marketing plan.
Most agents do not have a marketing plan, except for ads and open homes, which do not work.
Most agents only work in a few cities. Therefore, listing with the average agent who is outside your city makes little sense - except with Gordon Allen.
With Gordon's marketing plan, it makes no difference where his office is in relation to your property. His marketing plan and strategy work wherever he wants to it to work.
It makes no difference how many agents are in the broker's office - They do not work together.
Most agents only get 50-80% of their commission. They have very little left over to re-invest into their business.
Most agents do not have the necessary computer programming skills to effectively market homes or to put together a targeted mailing list in 5 minutes.
Agents who have assistants need a high volume of business to pay for the assistants.
A high volume agent has less care and attention to detail and is less effective.
Appraisals are usually not accurate indicators of real market value.
Appraisals 99% of the time "come in" at the purchase price reflected in the purchase agreement.
This is why your REALTOR® must be very good at estimating values.
Over 90% of Gordon Allen's listings sell at full price.
Most agents will tell you your property is worth more just to obtain the listing.
Gordon Allen's average marketing time for his listings is 21 days.
Most listings expire and do not sell the first time listed.
Return to the top of the page.
Buyers
Loan agents do very little work after taking your application - the loan processors do the rest.
  • Loan agents are suppose to gather all of the documentation upon meeting you, but they keep coming back for more.
  • Loan agents are to let you know, upon approval of your loan, the wisest time to "lock" the rate.
  • The interest rates quoted in the media are not able to be locked in and change by the time you read them.
  • A loan can be approved and funded in as little as 5 working days.
  • Any real estate agent can show you property.
  • You do not have to use a real estate agent just because he/she showed you the property.
  • However, upon entering an open house and signing the registry, you may inadvertantly cause that agent (through "procuring cause") to become your agent for that property. Or at least that agent may be entitled to part of the commission
  • Most Buyers do not carefully choose an agent to represent them.
  • Gordon Allen can prequalify you in 5 minutes over the phone and pre-approve you in one day.
  • Gordon Allen only acts as a loan agent for his own transactions.
  • Most buyers start looking without knowing what they can afford.
  • Most buyers do not review the comparable sales in the area before making an offer, and pay more for the property than it is worth.
  • Foreclosures are usually not any better deals than any other property for sale, unless you have all cash and show up at the courthouse and buy it "as-is."
  • VA and FHA foreclosures that are available on the Internet are usually not the best buys.
  • All properties which have been foreclosed on are available from Gordon Allen in a report which he can fax/e-mail to you
Return to the top of the page.
On Real Estate Agents and Brokers...
Swamped with Junk Mail?...
  • There are over 30,000 licensed real estate agents in the Bay Area.
  • Most are part timers, "inactive" or have gone into the loan business, or into management
  • Most leave the business after just six months.
  • Most specialize in only one or a few areas.
  • Most full time agents handle less than a dozen transactions annually.
  • Most are unable to adapt and survive changing market conditions.
  • Most will tell you what you want to hear just to get your business.
  • Some agents make a living just on referrals, rarely showing homes or keeping in touch with the realities of marketing real estate.
  • Most are unable to use the computer effectively except perhaps to log in to online services.

Return to the top of the page.

Here's Why Large Real Estate Companies Look Impressive, But Offer No More than the Average Individual Agent and Much Less than Gordon Allen.

  • They are in the business of managing agents (making money off of them), not marketing or selling homes. There is a HIGH turnover rate of new agents. And since new agents are highly motivated during their first 6 months, the recruiting real estate companies make approx. 50% of each agent's commission.
  • Each agent is a self-employed independent contractor (they're each like a one-person office)
  • The larger the company, the harder it is for an agent to do those things which really work. Too much paperwork and administrative tasks get in the way of creative marketing ideas - but also most agents can't even put together a simple database from a text file.
  • Sellers: The major benefit to you would seem to be large company advertising campaigns - Reality is that this type of marketing provides little or NO direct results for your property.
  • Buyers: Any agent can show you any property listed by any company.
  • Most agents use the same forms to present your offer, but what counts is your agent's ability to represent you in writing when "sticky" situations arise, which are many in today's transactions.

Your REALTOR® should offer you more services like financing and other customized services like...

  • How do I reduce the paperwork lenders keep asking me for?
  • Will I get the best rate?
  • When do I lock the rate?
  • How do I minimize my closing costs?
  • Who will explain all this paperwork to me?
Return to the top of the page.
Buyers - You'll be a Seller One Day - So Choose a Realtor Who is Successful at Marketing
Few owners use the same agent to sell as the one they used to buy their home. How come? They simply weren't happy with the representation or service they received. So, as a Buyer, make sure you interview a good REALTOR® who has a winning marketing plan and great buyer services and representation. And chances are high that Gordon Allen will be around for another 60 years to help you sell your new home. He started his real estate career at the age of 19 in 1982. Count on him to tell you the truth whether you are a Buyer or a Seller. Interview him today.
 
 
 
The Real World of Real Estate
Here's Why You're Swamped with Junk Mail at home...
There are over 30,000 licensed real estate agents in the Bay Area.
Most are part timers, "inactive" or have gone into the loan business, or into management
Most leave the business after just six months.
Most specialize in only one or a few areas.
Most full time agents handle less than a dozen transactions annually.
Most are unable to adapt and survive changing market conditions.
Most will tell you what you want to hear just to get your business.
Some agents make a living just on referrals, rarely showing homes or keeping in touch with the realities of marketing real estate.
Most are unable to use the computer effectively except perhaps to log in to online services.

Return to the top of the page.

Here's Why Large Real Estate Companies Look Impressive, But Offer No More than the Average Individual Agent and Much Less than Gordon Allen.
They are in the business of managing agents (making money off of them), not marketing or selling homes. There is a HIGH turnover rate of new agents. And since new agents are highly motivated during their first 6 months, the recruiting real estate companies make approx. 50% of each agent's commission.
Each agent is a self-employed independent contractor (they're each like a one-person office)
The larger the company, the harder it is for an agent to do those things which really work. Too much paperwork and administrative tasks get in the way of creative marketing ideas - but also most agents can't even put together a simple database from a text file.
Sellers: The major benefit to you would seem to be large company advertising campaigns - Reality is that this type of marketing provides little or NO direct results for your property.
Buyers: Any agent can show you any property listed by any company.
Most agents use the same forms to present your offer, but what counts is your agent's ability to represent you in writing when "sticky" situations arise, which are many in today's transactions.
Your REALTOR® should offer you more services like financing and other customized services like...
How do I reduce the paperwork lenders keep asking me for?
Will I get the best rate?
When do I lock the rate?
How do I minimize my closing costs?
Who will explain all this paperwork to me?
Return to the top of the page.
Gordon strictly adheres to the Realtor's Code of Ethics. He's even sacrificed tens of thousands of dollars in commissions to prevent conflicts and problems and to avoid breaking any of these code of ethics. One of these code of ethics it to "not mislead the public." He's never been involved with any disciplinary action by anyone - including clients, the Department of Real Estate, the California Association of Realtors nor any of the Bay Area Association of Realtors, etc. But Gordon's competition is using words that are misleading. Here's the truth about "the big real estate companies."
 
Do real estate companies, who collect fees from their agents, provide real services that one agen can?
Agents hide behind and use a large company name for these reasons:
 
Copyright 2006 © Gordon Phillip ALLEN REALTORS®. All rights reserved.
Do not duplicate or distribute in any form.