Brokers Blog

Home brokers in Southwest Florida will still face home price declines in the coming months, and full market recovery is still years away, according to speakers at the Market Watch 2010 event held in Fort Myers last week.

Veteran broker Denny Grimes, co-founder of the event and head of Denny Grimes and Company, told more than 700 realtors, brokers and other real estate professionals who attended the event to be realistic about home prices and to prepare for further price declines and further troubles in the commercial property sector.

Grimes said that the housing market has become obese and that it needs time to correct itself. He added that home prices are still low, but low price levels would increase sales and would cut down housing inventories.

According to Grimes, only 12 Lee County homes priced below $100,000 were listed in 2006. Today, he said, about 2,200 houses priced under $100,000 are being offered for sale in the area.

He also explained that total home sales last year broke the sales record achieved in 2005 and posted a 40-percent increase over total sales in 2008. The increase in number, however, did not translate into a corresponding surge in dollar volume as low home prices put the dollar volume increase at only 16 percent.

Grimes also told the home brokers that he believes the median home sales price has stabilized at around $98,000, which is 18-percent above the $79,900 median price in June 2009. However, recently built houses priced above $300,000 will continue to struggle in the market and owners will be forced to cut their listing prices. He mentioned Estero and Bonita Springs, which are still struggling from a 17-month supply of homes, most of which are priced above $300,000.

Another veteran broker Stan Stouder spoke about trends in the Southwest Florida commercial property sector. He said that high unemployment rates and uncertain capital markets will drive more commercial foreclosures. He added that developers will continue to face financing difficulties, but they will still attract entrepreneurs and investors if they incorporate in their projects the benefits of a busy airport, a sunny climate and the commitment of the county to green technology.

At the end of the session, most home brokers probably echoed the view by real estate appraiser and valuation counselor Anthony Mollica who said that Grimes and Stouder both were right in setting a cautious optimism for the residential and commercial real estate markets in Southwest Florida.

Home brokers are now teaming up and doing innovative sales and customer relations strategies to stand out from thousands of real estate agents and brokers and beat the competition.

In Westchester, New York, forming teams of three to five real estate agents operating under another name within a larger real estate brokerage has been gaining ground. An example is the broker team in Rye called Alix Prince Team, which is part of the brokerage Julia B. Fee Sotheby’s International.

Prince said she and three other real estate agents work together and then divide whatever commission they get based on each agent’s contribution to the sale and then share part of the commission to their brokerage.

According to Prince, a team is more successful if each member has a particular skill and contributes a significant asset to the team. Her team consists of young agents who are able to produce new listings using their past work experiences and social networks.

In Manhattan, Elaine Clayman, who heads an 8-member team operating under brokerage Brown Harris Stevens, said that clients prefer working with teams because they do not have to worry about a particular real estate agent resigning and leaving transactions uncompleted because there are other home brokers in the team who will take over.

In Larchmont, New York, Tom McGuire and three other real estate agents at Weichert Capital Properties and Estates formed Realtors 4. Unlike other models for teams, they split evenly the commission. They do not have to analyze each agent’s contribution to the sale. Two of them get better listings and the two other agents work better as buyers’ representatives.

The White Plains team of Christine Ricci works within Keller Williams Realty. Her team is comprised by two buyers’ agents, an administrative officer, a part-time coordinator for marketing and a bookkeeper working part-time. Ricci explained that the responsibilities should be clear to avoid the common pitfalls of work teams.

Ralph Roberts, author of the book “Power Teams,” said that one of the problems in teams is handling egos, as some are better than others in producing money. But he reiterated that during these times when the competition is fierce and the market is struggling, agents and brokers need help from their colleagues.

Nevertheless, according to Stephanie Singer, spokesperson for the National Association of Realtors, despite the rise in the number of realtor teams working within larger brokerages, only about 9 percent of NAR home brokers are members of teams.

Home brokers in California can no longer use the advance fee approval they have previously obtained from the California Department of Real Estate for providing paid loan modification services to customers. More importantly, they can no longer charge fees upfront before starting their loan modification services for clients.
Consequently, the form titled Advance Fee Agreement for [...]

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In the past, any houses broker asking for personal financial information upfront before showing a home for sale would be met with a cold stare and would certainly trigger an immediate walk-out by the prospective buyer.
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Mobile home brokers in Michigan, California and other states have been facing various challenges during the downturn, as the demand for mobile homes or manufactured homes have been declining since the late 1990s.
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