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Real Estate Fight Club

30
Nov 2020

Episode 62: Should Buyers Pay Their Own Agent’s Commission?

In Episode 62 of the Toe-2-Toe Podcast, hosts Jenn Murtland and Monica Weakley, along with guest host TJ Gausman, duke it out over this: should the buyers pay their own agent’s commission? Until now, TJ has split his tiebreakers between Monica and Jenn, so hear who TJ sides with on this one.

Episode Highlights: 

  • TJ says there is no way that the buyer should pay their agent’s commission.
  • First-time homebuyers have a hard time in the difficult market and would have added emotional stress if they had to pay.
  • Monica thinks that the industry would face a massive amount of unrepresented buyers if it was left up to them.
  • It would be bad for the real estate industry as a whole if buyers choose to be unrepresented.
  • Jenn thinks that buyers should have to pay for their representation.
  • Buyers don’t see the value of the agent until the moment that the agent delivers.
  • Both TJ and Monica believe that adding a buyer fee would significantly change the way that buyers would choose to be represented.
  • Jenn believes that if buyers cannot afford to pay the fee then they cannot afford the house.
  • The 6% commission is kept by the agent as a listing fee whether the buyer is represented or not.
  • TJ explains to clients that selling agents take commissions and when they do decide to sell, they will pay that commission.
  • According to Bravo TV, there are no buyers’ agents in England at all.
  • Ultimately, the buyers are paying for the agent, it’s just packaged within the price of the house.
  • TJ believes that if appraisers didn’t build in the commission into the value of the home, they would sell at a lower price.
  • According to Jenn, buyers wouldn’t vanish because they are paying a fee anyway.
  • It sounds like there will be no agreed-upon precedent from this bout, pinning Jenn against TJ and Monica.
  • TJ is team Monica on this one, claiming that the system is not broke enough to add an extra variable.
  • Jenn respectfully disagrees, saying that because it is your purchase, you should pay for representation.
  • Buyers may or may not choose to go unrepresented, but that’s where these sides differ.

3 Key Points:

  1. Agents are not able to show their value to the buyers until they deliver, so it’s hard to ask for a fee at the beginning.
  2. Monica and TJ fear that most buyers would go unrepresented, while Jenn looks to the small number of sellers that go unrepresented as a sign that buyers would follow the same line.
  3. Appraisers build the commissions into the price of the house but explaining that mental Olympics might scare buyers off from their agents.

Resources Mentioned:

 

23
Nov 2020

Episode 61: Are Self-Showings the Way of the Future?

In Episode 61 of the Toe-2-Toe Podcast, hosts Jenn Murtland and Monica Weakley are not fighting, but discussing this question: are self-showings the way of the future? Well, they’ll always be around, but listen in to hear why Monica and Jenn say no way!

Episode Highlights: 

  • Monica believes that there will always be value in being led through the most important purchase of their lives.
  • Some people are going to be impatient and always choose the self-showings.
  • Jenn is for self-showings for immediate responses and treats them like an open house.
  • According to Jenn, there is value in a buyer rep but the buyer, not the seller, should pay for that rep.
  • Many buyers will not shell out money to be represented and that may turn them away from using an agent.
  • If an agent doesn’t have experience with a lot of clients, they just get in the way.
  • Once buyers have seen the house on Zillow, they are allowed to go outside and bring their own buyer rep.
  • Builders will honor agents who represent a client, even if the agent was not present at the initial meeting.
  • The best buyers are ones that have taken the time to go through the process and examine all the details.
  • Monica always wants to be a present-tense agent who takes care of her clients after they’ve bought or sold their house.
  • Self-showing programs won’t ruin your business as long as you take care of your clients.
  • Neither Monica nor Jenn thinks that self-showings will negatively impact their business.
  • While you need to be there to serve your clients, don’t be a concierge agent.
  • This week’s tiebreaker, Leonard Cradit, is a Franchise Development Manager for Exit Realty and has a real estate team in Michigan.
  • With over 30 years of experience in real estate and property management, Leonard has seen greater success when agents are present.
  • An agent’s presence allows real estate teams and properties to pivot rather than lose a client if they don’t like what they see.
  • While it could be done over the phone, Leonard thinks clients appreciate the in-person service.
  • Sales and success ratios reflect that people appreciate agent-led showings.
  • Self-showings could give some relief to scheduling conflicts with clients, but that may make them question your validity.
  • Leonard thinks that the industry is damaged more and more the further it gets from hands-on service.

3 Key Points:

  1. People are better off doing a self-showing than using a terrible agent that is only going to mess up the deal.
  2. Self-showings are really just ways of showing houses to unmotivated buyers.
  3. Agents need to be agents to their clients every single day rather than being a paste-tense agent.

Resources Mentioned:

16
Nov 2020

Episode 60: Should You Use Your Commission to Settle a Buyer-Seller Dispute?

On this episode of the Toe-2-Toe Podcast, hosts Jenn Murtland and Monica Weakley throw down over whether you should use your commission to settle buyer and seller disputes. Politely, they agree to disagree on this one!

Episode Highlights: 

  • Jenn believes that because the agent is not a part of the contract, they should not be part of the negotiation.
  • Monica thinks there are definitely times where it absolutely makes sense to throw in from a financial standpoint.
  • Besides making a mistake, Jenn thinks agents are too quick to dip into their commission to get the deal done.
  • As agents, your time is valuable, so don’t partake in anything that does not pay you for your time.
  • Monica dealt with a client that was willing to walk for $600 over principle, so she decided to pay out of her commission.
  • Jenn thinks that agents should walk away because she expects the other side to cave in.
  • Monica looks at the consequences way down the road and lets those weigh into her decision to use her commission.
  • Don’t just immediately give up your commission, but if it makes sense financially, don’t be blind to the benefits.
  • If you decide to walk away, you have to spend more time finding a new deal, and also, having your sign up for that long looks bad.
  • Even though you are willing to give up your commission, it’s not ethical to ask the other agent to give up their money.
  • Jenn believes that if the parties involved in the contract can’t figure it out, then they are too caught up in their emotions.
  • If you are able to get your clients all the way to the end, make sure they cross the finish line.
  • Monica and Jenn actually agree that too many agents give in far too early.
  • Buyer’s agents tend to give in more frequently, and they can’t be sure that they are going to get the deal.
  • Monica hates that agents consider themselves busy with tasks other than buying and selling houses.
  • Take your desired income divided by your hours to determine the worth of your hourly pay rate.
  • This week’s tiebreaker, Anne Uchtman, is an agent and the Director of Agent Development and Training with StarOne, so she knows the rules.
  • If a deal with the other agent has been reached, then Anne believes it’s worth it to dip into commission.
  • Agents aren’t just showing beautiful houses all day; there are plenty of challenges and hindering factors.
  • It’s in the code of ethics that agents need to cooperate with each other in the best interest of their clients.
  • Every brokerage has different rules in regards to their agents cutting a check to settle a dispute.
  • While this is a viable tactic, it is not to be regarded as the first line of defense.

3 Key Points:

  1. Agents need to understand the value of their time so that if they are doing any task that does not sufficiently pay for their time, they know they need to back out.
  2. The difference between buyer’s agents and seller’s agents is that buyer’s agents don’t even know if they’re going to get the deal, thus making them more likely to give up their commission with the long process.
  3. Though they agree that agents give in too early, Jenn and Monica differ in their opinions on whether or not you should dip into your commission at all. Monica says yes while Jenn says no.

Resources Mentioned:

9
Nov 2020

Episode 59: What Happens When Your Friend Hires Another Agent?

In this episode of the Toe-2-Toe Podcast, hosts Jenn Murtland and Monica Weakley duke it out over what to do when your friend hires another agent. This has happened, and will happen to every real estate agent, so pay attention!

Episode Highlights: 

  • Agents’ egos get hurt when their friends choose another agent.
  • It might be on you for not doing your due diligence.
  • Plenty of people don’t want to mix business and pleasure and prefer not to work with their friends.
  • You can’t just assume that everybody is comfortable working with you.
  • Be upfront and ask if your friends are comfortable working with you or if they need a referral.
  • You never know if someone has an agent that their family has used for years.
  • It’s always harder for an agent to put their ego aside when they find out in another way than hearing it from their friend.
  • Jenn has incredibly thick skin from her experience making cold calls, so this does not bother her too much.
  • Monica has shear-thin skin and has had her feelings hurt in the past by friends not using her as an agent.
  • It’s important to let go of this one and move onto the next deal.
  • If you have a problem letting go, there might be a problem with the friendship or the business.
  • Agents have no problem promoting their side gigs but they do have a problem promoting their real estate business.
  • Every agent has had a friend choose another agent over them.
  • Instead of being poisonous, look back and determine what you could have done differently.
  • Post every day on your social media about real estate in a creative and engaging fashion.
  • Monica has created an entire library of creative post ideas that you can use for your social media.
  • Jon Bowling, this week’s tiebreaker, is one of the top performers with ReMax out of Cincinnati.
  • Running a sphere of influence business leads to an 88% failure rate amongst real estate agents.
  • You can inquire about why they didn’t choose you without ruining the relationship.
  • Jon has had multiple friends that have passed on using him as an agent and is still friends with all of them.
  • Generating leads in multiple ways is the best way to make sure your real estate business stays above water.
  • Agents have all had situations where friends did not choose them, yet they continue to come to them for advice.
  • There is definitely a wrong way to react to this whole situation; don’t burn bridges.

3 Key Points:

  1. It’s wrong to assume that your friends are comfortable working with you. Do your due diligence and ask them.
  2. Present yourself as a real estate agent whenever and wherever you can or you will get put in the friendzone.
  3. Communicate with your past clients and sphere in a fashion that will cause them to give you business or refer you.

Resources Mentioned:

2
Nov 2020

Episode 58: The Top 3 Financial Mistakes That Agents Make

In Episode 58 of the Toe-2-Toe Podcast, hosts Jenn Murtland and Monica Weakley hit you, the listener, between the eyes about the top three financial mistakes that agents make. Here’s the twist: they’re not fighting with each other, they’re coming after you!

Episode Highlights: 

  • Real estate agents tend to be bad with their numbers and don’t even know their PNL.
  • A PNL, Profit and Loss Statement, is the only way a business owner can know if they are making money.
  • Agents need to look at their PNL every week, especially if they are trying a new tactic.
  • You can either use software like Quickbooks or YNAB, or you can hire an accountant to track your money.
  • It’s fine to be an LLC while you are just learning the business for the first few years, but taxes will come to get you when you start to grow.
  • Save roughly 30% of each check to put toward your taxes or when the bill comes, it’s going to hurt.
  • The state wants its money and will follow-up on that collection 100% of the time.
  • Think of yourself as your company’s manager of its assets and money; would you fire yourself?
  • Stay focused on what’s real rather than spending your commission before you even have it.
  • Re-examine the relationship that you have with your broker from a financial standpoint.
  • Determine what the ROI, return-on-investment, should be whenever purchasing anything.
  • Jenn believes that earning 8x on any deal is ideal, though she will settle for 5x.
  • Agents need to look at the whole picture and factor in the hours spent chasing leads.
  • Agents are far too quick to give up their commission to make a deal work when they should just find another buyer.
  • When you give up commission, you are taking money away from those that are financially dependent on you.
  • What is the first step that an agent should be taking to fix their financials?
  • Jenn thinks the most important thing for agents to do is track their numbers and hold themselves accountable.
  • Tiebreaker Eric Steinhoff, from Steinhoff Properties Group, serves Maryland and does 85% of his business in one neighborhood.
  • Both Eric and Jenn got hit with a massive tax bill when their businesses started to take off.
  • Eric believes that most agents make the mistake of not taking their accounting seriously.
  • Over-saving into a tax account can lead to overspending from that account, therefore, it should be kept realistic.
  • Whether you are good at what you do or bad at what you do, you get paid what you’re worth.
  • Stop spending money on services that you do not need; cut out unnecessary expenses.
  • Many agents make the mistake of not learning and adjusting to the changing times.
  • Agents get too caught up with their ego and the perception that others have of them.

3 Key Points:

  1. A PNL, Profit and Loss Statement, allows agents and business owners everywhere to track their expenses and make more money.
  2. Agents make the mistake of not paying their taxes correctly, whether it be per deal, month, or quarter.
  3. Stop reducing your commission. If the buyer and seller are too far apart, find another buyer.

Resources Mentioned:

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