get the best deal when selling your home, albuquerque edition

The following is a sample of the testimonialsreceived on the Best Deal series:

Many Realtors® might put this down as too elementary, but Iwish all my clients would review the simple steps providedhere so they could learn to be an effective part of theteamwork it takes to fulfill their dreams. This book has theexact things most buyers and sellers need to know but areafraid to ask.

—John Foltz, President, Realty Executives

This book is a wonderful road map for the ever-confusingworld of real estate. It’s like having your own personal coachin a box.

—Melissa Giovagnoli, Author, best-selling book, Networlding: BuildingRelationships and Opportunities forSuccess and How to Grow a GreatBusiness and Power Network

The real estate world is constantly changing, so anyone who iseven considering buying [or selling] property of any kindshould first get a copy of this easy-to-read and straightforwardbook. [It] demonstrates how valuable a good real estateprofessional can be and—further—how to select the right one.Smart real estate agents will also read the book to ensure their[clients] are receiving the service and the expertise theydeserve.

—Dave Liniger, Co-founder andChairman of RE/MAX

This book should be required reading for all Realtors® and foranyone serious about real estate.

—Peter J. McLaughlin, author ofCatchFire: A Seven Step Program to IgniteEnergy, Defuse Stress and Power BoostYour Performance

I read your book and I think it is eminently readable. That’sone thing most such publications intended for the public failto be. There is a lot of good information in it that consumerscan benefit from.

—Edwin J. Ricketts, DeputyCommissioner of the ArizonaDepartment of Real Estate

1

. . . In life it seems you don’t get what you deserve, you getwhat you negotiate, and How to Make Your REALTOR® Get Youthe Best Deal gives you the necessary tools it takes to be in thebest possible position to negotiate in real estate. My hat is offto Jenny, Ken, and their national consortium.

—Mike Barnett, VP Technology ofInternet Crusade (an organizationproviding communication training toRealtors® nationwide)

In this book . . . several profoundly successful real estate agentshave provided a simple guide through the often dark andconfusing waters of homebuying or selling. They demonstratethe impact of recent changes in the law and how thosechanges can affect the quality of representation one receives.Read this book and you will learn how to screen, select, andthen use your Realtor® in a way that Gets You the Best Deal.

—Steve Largent, U.S. CongressionalRepresentative, Oklahoma

This is a groundbreaking work for homesellers. It is not only aquick read, but it puts in layman’s terms the language of realestate. This book will do more to empower the homesellerthan anything else in print. I strongly recommend you buythis book before you even consider putting your home on themarket.

—Michael E. Houtari, Corporate Attorney

2

Get the Best DealWhen Selling

Your HomeAlbuquerque,

New Mexico Edition

3Gabriel Publishing\DeVelieg Seller NM printer’s final pagesTuesday, July 10, 2007 10:58:30 AM

Color profile: DisabledComposite Default screen

Attention corporations, schools, and organi-zations: Quantity discounts are available onbulk purchases of this book for incentive gifts,training, fundraising, or public relations. Specialbooks, booklets, or book excerpts can also becreated to fit your specific needs. For informa-tion and pricing, please contact:

Specialty Department, Gabriel Publications14340 Addison St. #101

Sherman Oaks, CA 91423(800) 940-2622 or email to

[email protected]



Get the Best DealWhen Selling

Your HomeAlbuquerque,

New Mexico Edition

by Linda DeVliegand

Ken Deshaies

Gabriel Publications



Copyright © 2007 Home Delivery Real Estate, Inc.

All rights reserved.No part of this book may be used, reproduced, or transmitted in anyform or by any means electronic or mechanical, including photocopy-ing, recording, or any information storage and retrieval system, with-out permission in writing from the Publisher.

Gabriel Publications14340 Addison St. #101Sherman Oaks, California 91423Visit our website at www.gabrielbooks.comOr call: (800) 940-2622

Get the Best Deal When Selling Your Home, Albuquerque, New Mex-ico Editionby Linda DeVlieg and Ken DeshaiesISBN-13: 978-1-60026-006-3ISBN-10: 1-60026-006-3Library of Congress Catalog Card Number: 2006931149

Typography: SDS Design, [email protected] Design: Dale Schroeder, SDS DesignEditors: David Robman and Nina HickeyPublisher: Gabriel Publications, Simon Rawlinson, V.P.

Manufactured in the United States of America.



Contents

Acknowledgments . . . . . . . . . . . . . . . . . . . 7

Disclaimer. . . . . . . . . . . . . . . . . . . . . . . 11

Introduction by the Publisher . . . . . . . . . . . . 13

About the Authors . . . . . . . . . . . . . . . . . . 15

Selling Your Home:The Basics

1. Going It Alone . . . . . . . . . . . . . . . . . . 21

2. Using a Real Estate Broker . . . . . . . . . . . . 27

3. The Role of the Internet . . . . . . . . . . . . . 50

4. How Much Is Your Home Really Worth? . . . . 59

5. Selling Your Home in an Up or Down Market . . 63

6. Dressed and Ready for Sale. . . . . . . . . . . . 74

7. Screening Prospective Buyers . . . . . . . . . . 99

8. Closing the Deal . . . . . . . . . . . . . . . . 106

9. Preparing for Uncle Sam . . . . . . . . . . . . 122

Buying Your Next Home

10. Buying Your Next Home . . . . . . . . . . . . 131

11. Epilogue. . . . . . . . . . . . . . . . . . . . . 138

Preferred Partners . . . . . . . . . . . . . . . . 139

Appendix A—Glossary of Terms . . . . . . . . . . 141

Appendix B—Moving Checklist. . . . . . . . . . . 149

Appendix C—Budget Forms. . . . . . . . . . . . . 153

Appendix D—Spending Register . . . . . . . . . . 159

5



Acknowledgments by Linda DeVlieg

I would like to thank my cherished partner, Max, whotaught me the principle of customer service and devotionto your business. If you give it your best effort, you canexpect to achieve results. He has also given me strength inmy life to reach personal goals and the realization thattime is the most precious thing we have.

To my web designer, Keli, who has taken me to theheights of Internet marketing. She has worked with meand my website for years so that I could be the best.

To my many colleagues (especially the CyberStars™and e-PROs) and real estate mentors with whom I haveshared experiences both good and challenging, thanksfor helping me make real estate something I do well.

To the ladies at Fidelity National Title who havemade the process so easy for my sellers by having servicesecond to none, and knowing when to alert us to poten-tial problems before they become an issue.

To Ray Westerman, who has always been a greatexample to me of hard work, honorable living, andalways told me “never do anything in business thatwould keep you from sleeping well at night!”

To Ken Deshaies, who has been a friend and inspira-tion. I will be forever grateful to you for introducing meto the CyberStars™.

To my customers, who have put their trust in me andgiven me the opportunity to serve them in both happyand sad times, I thank you for allowing me to do the bestI can.

7



To my parents, Marie Westerman and DickDeVlieg, who raised me to respect myself and othersand to know that nothing is beyond my grasp.

I hope that by reading this book you will grow tounderstand the complexities that are involved in a realestate transaction. By implementing some of the ideasand hiring a professional, you can achieve a hassle-freeclose and move on to a new beginning!

8



Acknowledgments by Ken Deshaies

There are those without whom this book would not havebeen written, and they deserve more than the recognitiongiven here. Their faith in me, at times, exceeded my own.

My publisher, Rennie Gabriel, and I have formed apartnership of ideas that has done several things. My firstbook, How to Make Your Realtor® Get You the Best Deal, hasbeen much more successful than either of us ever imag-ined. As a consequence, we have both been able to bringa semblance of understanding and self-help to thousandsof consumers across this great land. We have also enableddozens of Realtors® to participate in getting out their mes-sage. In the process, we have become great friends andcohorts. Not everyone will agree with our methods, butwe have not necessarily been seeking agreement. Whatwe have done, I would hope, is to empower people onboth sides of the real estate purchasing process alongwith the professionals who work with and representthem.

I must thank my good friend, a fellow Realtor® and e-PRO, Mollie Wasserman. Mollie is a true pioneer in thearea of real estate and the Internet, and we are truly fortu-nate that she was willing to provide a special chapter forus on this topic. This is a very important subject intoday’s real estate transactions, and we urge all of ourreaders to make sure they are prepared to deal with thebenefits and limitations of the Internet.

Davida Sims and David Robman contributed somuch to this manuscript, and their efforts are more thanappreciated.

9



Allen F. Hainge is the founder of the CyberStars™,an elite group of Realtors® from around the country andabroad who not only can prove experiential success withthe use of technology, but have also agreed to be teach-ing professionals with Allen. Allen welcomed me withopen arms into this wonderful organization several yearsago, and he has become a good friend and mentor eversince.

John Beldock, founder of EcoBroker™ Interna-tional, a school for training real estate professionalsabout energy efficient homes, has provided valuable con-tributions to this book.

Thanks to the hundreds of clients with whom mywife, Mary, and I have worked with through the years,and who have provided the fodder and the inspirationfor this book. So many of them have become goodfriends in the process that our family is huge in itsabundance.

Patricia McDade, founder and inspirational leaderof The Entrepreneurial Edge, provided the initial kick inthe proverbial rear to get me to do over that which I’dprocrastinated for so long.

“You don’t end up in the grave. You end up inthe hearts of the people you have touched.”

10



DisclaimerWe’ve tried, we really have. We have attempted toensure that everything said here is accurate and relevant.But laws change, circumstances vary, home prices andinterest rates change, and there is always the possibilityfor error. There may be mistakes, both typographical andin content, and the information was current only up tothe printing date. Using the guidance offered here, alongwith your selection of a competent real estate profes-sional, you should feel confident in purchasing or sellingreal estate. This text should be used only as a general guideand not as the ultimate source of real estate information.If your situation is complicated by any of a myriad of fac-tors, such as the property being a business, farm, or ranch,or if it has soil, septic tank, well, or title problems, we rec-ommend you consult with a Realtor® who specializes inthat area. We are not providing any accounting, legal, ortax advice in this book. We recommend that you hire anattorney or other appropriate professional who can assistwith the specifics involved in any legal or tax matter. Thepurpose of this book is to educate and entertain. The pub-lisher and authors shall have neither liability nor responsi-bility to any person or entity with respect to any loss ordamage caused, directly or indirectly, by the informationcontained in this book. If you do not wish to be bound bythe above, you may return the book for a full refund.

About gender usage: In order to avoid numerousgrammatical messes and to make the reading flow better,we have chosen to make this book as gender neutral aspossible. We have used they and their, even for one per-son, instead of he or she, his and hers and so on.

About the term Realtor®: This is a registered trademarkof the National Association of REALTORS® (NAR), andanyone who uses that term as part of their professionalidentity must be a member not only of the NAR, but also

11



of their local and state associations. We always encourageboth buyers and sellers to seek out the services of aRealtor® when possible. However, even though we recom-mend the use of a Realtor®, we know there are manysmall communities in the country where there are noRealtors®. Often throughout this book we refer to

“licensee,” “real estate salesperson,” “broker” and soforth. We do this because anyone who holds a real estatesales license must abide by laws, which we will cover inChapter 2. These laws apply to all real estate brokers inthe United States, not just Realtors®. To make the text eas-ier to read you will see the term Realtor® used showing theregistration mark and lower case letters after the initialcapital R. Please see Chapter 2 for a more complete expla-nation of this designation.

Again, please consult with a professional in your statebased on your situation. You can also reach the authordirectly through the contact information provided nearthe beginning and end of the book. Also, feel free to con-tact the author for a referral to a Realtor® in your area.

12



Introduction by the PublisherFor many people, their home is the largest investmentthey will make in their lives. This book is designed to helpyou, as a homeowner, get the greatest return when you’reready to sell that asset. But right now your house is yourhome. It is the place where you shelter yourself from the out-side world, where you raise children, bond with your mate,or express your individuality. When it comes time to sellyour house (and your home), your thinking has to shift fromyour home as being a personal statement of who you are, orwhat your values are, to an investment vehicle that willappeal to the greatest audience. It needs to appeal to the spe-cific demographics of your potential buyer. Remember, theprospective buyer will be comparing your home to all theothers on the market that fit their needs, wants, and desires.

A small change or addition to your house can addthousands of dollars of profit to you, while spendingmoney in the wrong way can actually cost you thou-sands more than you spent. You will see many examplesin the following pages, but here is one example: If youspent $25,000 on a swimming pool, you would be luckyto get half of that back in the increased value of yourhome. In addition, you would pay additional propertytaxes, utility bills, and cleaning and maintenance costsover the life of the swimming pool.

Unfortunately, many people think they can save thou-sands of dollars by selling a home themselves. The require-ments of disclosure when selling a home are getting ascomplicated as brain surgery. Someone in need of brainsurgery could save thousands of dollars by reading medi-cal manuals and then attempting to perform the opera-tion themselves, but it would just be silly. Just as silly asselling a home “by owner.” How can the experience of sell-ing one or even a few homes match the experience of aprofessional who does it day in and day out?

13



A study conducted by the National Association ofREALTORS® determined that people who sold theirhomes themselves received 16 percent less than compara-ble home sales in which the owner used the services of aRealtor®. Another way of looking at this is to recognizethat avoiding the services of a broker and saving about 7percent—or less—on commissions cost 16 percent of thesales price that could have been received.

If you are a homebuyer you might be thinking thatyou’re paying 16 percent more when you buy a homethrough a Realtor® instead of going directly to an owner.But based on national figures, the initial sale price anowner sets is well above the appropriate market price ofcomparable homes. In most situations a buyer workingdirectly with a seller, with no broker support, will notknow if the home is underpriced or overpriced. Theywon’t know what inspector to hire to evaluate the integ-rity of the structure and systems, nor might they under-stand the responsibilities and liabilities of the otherparty. In many cases they will not know what forms andwording will provide the best protection if somethinggoes wrong. And there are a host of other items that pro-vide safeguards to both the buyer and the seller that theymight not know. This book will cover all of these issues,and more.

In this book, Linda DeVlieg and Ken Deshaies exposethe secrets of how Realtors® are able to get more moneyfor homesellers and sell homes faster than those whoattempt to do it for themselves. The authors not onlyshare their own experiences, but have interviewed lead-ing Realtors® from around the country in order to gatherthe best ideas and practices currently being used. If youare not already a homeowner but looking forward to buy-ing your first home, this book can also give you invalu-able insights into how to find the right home, financethe purchase, and save thousands of dollars in theprocess.

14



About the Authors

Linda DeVlieg is a Realtor® in New Mexico. Her designa-tions include: Accredited Buyer Representative (ABR), e-PRO, Real Estate Cyberspace Specialist (RECS), an AllenHainge CyberStar™ (an elite group of Realtors® who haveproven that they generate a significant portion of theirbusiness through the use of current technology). She isalso EcoBroker™ certified. She was named a CyberStar™in 2003 and attended her first CyberStar™ Summit Con-ference in 2004 in Phoenix, Arizona. Linda serves on theSouthwest MLS Policy Committee and is an iSucceedmentor.

Linda works for Coldwell Banker Legacy in Albuquer-que, where she has been an active broker since 1995 anda resident since 1979. Albuquerque is located in northcentral New Mexico and is a fast growing and popular des-tination place for new business, as well as those lookingfor lots of sunshine and clean air. The real estate marketin Albuquerque has always been healthy and competi-tive. It is important to know how to market a home in afast moving market where prices can be competitive andproperties need to be marketed to stand out above thecrowd. Linda’s unique abilities with technology are use-ful for achieving this purpose and providing exposureand marketing plans to achieve the client’s goals.

Before her career in real estate, Linda worked in alarge law firm and later received her Bachelor of Artsdegree in criminal justice from the University of NewMexico. While she initially planned on going into law,she decided to give real estate a try when she was encour-aged by a close friend who thought her organizationalskills and interest in business and sales would help herachieve success.

15



Linda can been seen around town with her Palmphone and tablet PC, always in touch with customersand always a click away from her email and computerprograms that give her the cutting edge in Albuquerque’sreal estate market.

To reach Linda DeVliegPhone Direct: (505) 440-7200

Phone Toll Free: (877) [email protected]

or see page 140

Ken Deshaies is a real estate broker in Colorado. Ken is anAccredited Buyer Representative (ABR), Certified Residen-tial Specialist (CRS), graduate of the REALTOR® Institute(GRI), one of the first 500 Realtors® in the country tobecome a Certified Internet Real Estate Professional (e-PRO500), Real Estate Cyberspace Specialist (RECS®), AllenF. Hainge CyberStar™ (an elite group of Realtors® whohave proven that they generate a significant portion oftheir business through the use of current technology),and is EcoBroker™ certified. He has coauthored over 70books on real estate. He was named CyberStar™ of theYear for 2002 and elected president of the Summit Associ-ation of REALTORS® for 2003. He served on the commit-tee for the Colorado Association of REALTORS® that spear-headed the change in agency laws effective in 2003. Kenserves on the Grievance Committee of the Colorado Asso-ciation of REALTORS® and is an iSucceed mentor.

Ken works in partnership with his wife, Mary, in theirbrokerage, SnowHome Properties. He began his realestate career in Denver in 1992 and has worked in Sum-mit County since 1994. Located an hour west of Denver,Summit County is home to four ski resorts and the high-est freshwater sailing lake in the United States. While

16



selling resort real estate is similar in many ways to sellingin a metropolitan area, it offers unique problems. Forexample, since two out of three buyers are buying nonres-idential properties, marketed materials, use of theInternet, and extensive use of digital photography areessential to a successful marketing plan.

Prior to real estate, Ken owned a private investiga-tions firm for 12 years in Denver, employing and super-vising as many as seven investigators and serving for aperiod as the president of the Professional Private Investi-gators Association of Colorado. In this work, he con-ducted numerous investigations into real estate transac-tions and fraud claims. Many of the stories in this bookare based on Ken’s experiences, both before and after hebecame a Realtor®. During much of this time, he was alsoa member of the Win/Win Business Forum of Denver andwas its president for a year and a half.

To reach Ken [email protected]

or see page 140

17



Selling YourHome:

The Basics

19



1. Going It AloneMy husband, Dave, and I met Linda about 5 yearsago when we sold our townhouse in Albuquerque.Since then, whenever we had a real estate transac-tion, we’ve contacted Linda. She has helped usbuy and sell investment property as well as mymother’s house in Corrales. Linda even helped usbuy a house from out of state. We just told her ourdesired location, size, and price range. Lindafound the house and sent us pictures by email. Itwas the right house and we’re in it today.

Linda’s experience as a Realtor® took the hassleout of buying and selling real estate. Her advicewas sound and she was always available to answera question or preview a property. Besides all that,Linda is a neat lady and I’m glad I got to meet her.We highly recommend her.

—Susan Sears

Many people who are considering selling their homeare not sure how to begin this process. Do you try to sellyour house on your own, or do you first enlist a broker?And if you want to try to sell your house on your own, willword get out there to that perfect buyer? The bottom lineis no matter which route you take to sell your home, youneed to educate yourself as much as possible. In this area,where the economic stakes can be high, knowledge ispower. By reading about the following experience, youwill see what can sometimes happen in the sale of a homeand understand why it pays to become educated. The fol-lowing story is true, and it may possibly help you decideon whether or not selling your house on your own is aworthwhile measure to save money.

21



The Money to MoveA few years ago, Ken was searching for the right home

for one of his buyers. He found a home not listed in hisMultiple Listing Service (the local Realtor® database inwhich all available properties for sale are listed) that wasbeing sold by the owner (called a FSBO in Realtor® par-lance). It appeared that the home might fit his buyer’s cri-teria, so he called the number listed on the flyer that theowner had posted in his yard.

Most FSBOs understand that even though they wantto save the listing commission, in almost 95 percent ofthe cases it will be a Realtor® who will bring in the buyer.So if they pay the Realtor® representing the buyer evensomething over half of a typical listing commission, theyfeel they are still saving money by not having to pay com-mission to a listing broker as well. That was the case herewhen the owner, John, invited Ken to preview his homefor the buyer. Ken visited with him and his wife later thatday.

The home was in a family neighborhood, well main-tained, and backed up to wetlands—things that wouldadd value to the selling price as compared to otherhomes on the market. However, John and Lucille wereplanning a move to another town and had calculatedinto their asking price what they felt they would need tofacilitate their move and the purchase of another homein their new location. While they did have some knowl-edge of other home sales in the neighborhood, their cal-culations led them to establish an asking price roughly15 percent over those comparable sales. They were asking$322,000 for a home that would have been properlypriced to sell at about $290,000. When Ken met withthem he was prepared with a market analysis and tried toexplain that the differential they were seeking was morethan the market would bear. They encouraged him to

22

Selling Your Home: The Basics



bring them an offer but made it clear they would stickfairly close to their asking price.

Ken’s buyers did look at the home but declined tomake an offer. Most buyers will offer less than an askingprice, but very few will offer when they feel there is toomuch difference between the asking price and market.

Ken watched as John’s ads reflected a price reductionto $312,000, but nearly three months later he finallylisted with a Realtor® at full commission. Unfortunately,now the asking price was back at $322,000 since the sell-ers were hoping to recover part of the Realtor® commis-sion in the sale price. After three months of attempts tosell, the price had dropped twice to $302,000. It was clearthe sellers were getting anxious to move. Then Kenshowed the home to another buyer who liked it andmade an offer. However, his clients were first-timehomebuyers with little cash and they needed a little assis-tance to get into the property. The offer was for $295,000and asked the sellers to carry a small note of $10,000 forfive years. In other words, the sellers were asked to lendthe buyers part of the down payment. The buyers werecreditworthy and otherwise fully capable of completingthe purchase. However, Ken could not get the listingRealtor® to understand the simplicity of the financing,and, while the sellers would have taken the price, theydeclined the offer.

The home ultimately sold a couple of months laterfor $272,000. That was $50,000 less than their initial ask-ing price, $23,000 less than Ken’s buyer’s offering price(the note would have been an extra bonus as it turnedout), and around $18,000 to $25,000 less than the homewould reasonably have sold for had it been properlylisted from the start. Ken and I cannot tell you how manytimes we have seen this very scenario across the country.Homes sell for less than market because they are pricedtoo high and become “stale.” Homes that are on the mar-ket for much longer than n ormal market conditions

23

1. Going It Alone



indicate often become the target of predatory buyerswho understand that the seller is now more desperateand, hence, willing to cut their price.

Should I Try It Alone?Although this story is not a guaranteed representa-

tion of the realities of selling your own home, what itdoes illustrate is that you must be educated. And often itpays to rely on an expert’s education and experience.

If you do decide that you are prepared for the task ofselling your own home, here are some importantsuggestions:

1. Take the time to educate yourself about theprocess of real estate transactions. Know howthe process works from beginning to end andwhat contractual and legal obligations youwill be responsible for.

2. Know what transactions must be performedby outside professionals, such as inspectors,title agents, or attorneys.

3. Pay to have your house professionally appraisedso that you price it correctly.

4. Have your home professionally inspected inadvance so that you know what might needto be repaired. Take care of those items youcan afford to repair in advance.

5. Establish a marketing budget and determinethe best ways to spend it.

6. Look for a preapproved rather than a prequalifiedbuyer.

7. As a personal safety measure, NEVER showyour house alone.

24




8. And finally, understand that while it is yourintention to save the real estate commissionin the transaction, most buyers also under-stand that and want the savings reflected inthe purchase price.

Selling your house is not impossible, but it takes dili-gence, patience, diplomacy, and a willingness to set asideyour own biases about your home so that other people’spreferences can be understood and accommodated.

Knowing the ProcessBefore you decide to sell your own home, ask yourself

the following essential questions to ensure that you areknowledgeable about these important aspects of realestate sales:

• Do I know how to properly value my home?

• Do I have a marketing strategy to reach the greatestnumber of potential buyers?

• Am I familiar with New Mexico’s legal require-ments for purchase contracts and real estate trans-fers?

• Can I ensure that the buyer is financially able topurchase my home?

• Do I have the necessary contracts to handle theclosing transactions?

• Will my homeowner’s insurance cover me for liabil-ity if a stranger to whom I am showing my homecauses damage (to my home, my belongings, orme) or steals from me? (Recent stories involve peo-ple who steal prescription drugs from homes.)

• How are my negotiating skills?

25

1. Going It Alone



• Am I prepared to carry back a note if an otherwisequalified buyer does not have the necessary downpayment?

• Am I prepared to give up a partial commission to abroker representing a buyer or a full commission toa transaction broker (known in some states as a “fa-cilitator”)?

The bottom line is that you must make sure you areprepared to deal with this major transaction. You shouldhave a plan in place and you should know who can helpyou with aspects that you can’t do alone. Just as moneydoesn’t grow on trees, houses don’t sell on their own. Ifyou are selling your house yourself, you must be pre-pared to make a substantial investment of time. If youare not sure how to handle this complicated sales transac-tion, using a professional may save you a great deal ofunnecessary complications.

26




2. Using a Real Estate BrokerWe knew Linda prior to using her to sell ourhome, and now we have a business professionaland friend to recommend to others. Linda is easyto work with, upbeat, knowledgeable, and has agreat positive attitude. She is always calm, level-headed and never in a rush to make a decision.

—Emma and Victor DelFrate

A real estate broker and a Realtor® are not the samething. Both may be experienced in the industry, but aRealtor® is a member of the National Association ofREALTORS® and follows a specific code of ethics. (You willfind more information on this in the following section,

“Credentials.”) Anyone who passes their state’s real estatelicensing exam can become an associate broker. They mayalso be referred to as a qualifying broker, licensee, or realestate salesperson in other parts of the book. There are nocost differences between hiring a broker and a Realtor®.

Although there are some costs (you will pay a commis-sion) associated with enlisting a broker or Realtor®, thereare also substantial benefits. For instance, not only does aRealtor® have access to thousands of potential buyersthat a homeowner may not be aware of, they also havethe knowledge to make sure that you are protected bothfinancially and legally. Additionally, there is some ele-ment of risk involved in selling your home, besides theobvious economic risk. Realtors® know important legaldisclosure requirements. Agents are well aware of the factthat you are allowing complete strangers into yourhome, and therefore know what precautions you shouldtake to protect both your family and your possessions.

27



One of the most important advantages of listing witha Realtor® is their access to the Multiple Listing Service(MLS). This is a proprietary database of almost all thelocal property listings. The MLS was designed by Real-tors® to share listing information with other Realtor®

members. The MLS provides the greatest exposure foryour property listing, which increases your chances of aquicker sale at a better price. Approximately 98 percentof all properties are sold by MLS members.

But these are just a few of the reasons why enlistingthe help of a Realtor® is a good investment. A Realtor®

can✓use extensive data and professional experience to

determine the best selling price for your home;

✓provide information about your home to thou-sands of potential buyers and their brokers;

✓ screen buyers and negotiate a sales contract;

✓ take on potential legal obligations and risks; and

✓ take you through every step of the process, all theway to closing.

What to Look For

CredentialsPicking a broker is a business decision that should be

taken with the same deliberation as any other importantfinancial decision. You want a broker who specializes inyour community, who is experienced, and who you areconfident will work hard for you. You’ve probablynoticed that when we’ve used the term Realtor® in thisbook, it is capitalized and the registration mark is used.There is a reason for that. The term Realtor® is a trademarkof the National Association of REALTORS® (NAR), andanyone who uses that term as part of their professional

28




identity must be a member, not only of NAR but also oftheir state and local associations. Anyone who is not amember, but is legitimately working in the real estate pro-fession, is still licensed by their state real estate commis-sion and can be identified as a broker, a real estate sales-person, and so on.

When Realtor® is used, however, it means severalthings. NAR members have training available only tomembers. They have the benefit of local meetings andstate and national conferences where they can networkwith other Realtors®. Many deals are actually made forbuyers and sellers at those events.

There is a price to pay: Members subscribe to a codeof ethics, which commits them to conduct their businesswith a sense of fair play. The public has some recoursewhen they feel they have been lied to, mistreated, orcheated. They can file an ethics complaint with the localassociation requesting that a Realtor® be disciplined, orrequest arbitration if they feel they have actually beencheated out of money. The Grievance Committee andthe Professional Standards Committee of the organiza-tion handle these complaints. While a member is notbound to submit to the grievance process when a com-plaint is initiated by buyers or sellers, most do so becauseit is a much simpler and less costly method of justicethan going to court.

Members have to pay dues, and the MLS chargesother fees to maintain a membership in good standing,but the bottom line is that they are in a position to pro-vide much better service to you than nonmembers.

Those who do not have the Realtor® designation areoperating independently. They often do not do enoughbusiness to justify the costs involved in belonging to theNAR. They are not bound by a code of ethics that governstheir professional actions, and in some areas they do nothave the benefit of MLS access.

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2. Using a Real Estate Broker



So for starters, get a Realtor®. You’ll usually find thedesignation on their business card.

HistoryIf you were taking in a roommate or boarder, you

would screen that person to see if you were compatible. Ifyou were renting out property, you would take a rentalapplication and check out the renter’s references andcredit history. If you were going into business with some-one, you would be smart to conduct a background check.It never hurts to know who you are working with. Thesame is true with a real estate broker.

As consumers, we have a terrible history of pickingprofessionals—doctors, lawyers, and even real estate bro-kers. We get a referral from a friend, attend the appoint-ment, and that’s usually as far as we go. If we end up dis-satisf ied later, it ’s our own fault for not takingresponsibility for our own selection. We need toprescreen, ask questions, get a feel for how compatiblewe might be, and determine how well that professionalcan meet our needs.

If you have a friend in the business, it can be difficultto select someone else, but it might be the most valuabledecision you can make. We have known people wholisted their homes with a friend who specialized in com-mercial sales but had never sold a house. You need to asksome questions before starting with any real estate bro-ker. Don’t sit down and say, “We’re looking for a house inthe $200,000 range.” Try something like, “Before westart, I’d like to learn a few things about you.” Interviewyour potential broker; ask questions and determine thefollowing important issues to your satisfaction.

Questions to ask a potential broker:

✓What other type of work do you do?

✓Do you work full time in real estate?

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✓How flexible is your schedule?

✓How available are you to show properties on week-days, weekends, mornings, and evenings?

Get a Full-Time Broker or a Professional TeamMost full-time brokers work 50 to 60 hours a week or

more. They are committed to their work and to their cli-ents. A part-time broker is there to make a deal when itcomes along, but either doesn’t need the income a full-time career produces or isn’t making it yet. These brokersmay even hold two or more jobs. Within reasonable lim-its, a Realtor® should fit their schedule to yours, not theother way around.

On the other hand, brokers who have spent someyears building their business will often enlist assistants,or team members. These brokers may then be in a positionto take more time off, but they have qualified team mem-bers to show property and oversee the details of transac-tions. Team leaders train their team members in the sys-tems and in the quality of customer service that theleader has developed over the years. Teams usually havespecialists handling different parts of the transaction, soyou will almost always have someone available to pro-vide seamless service. This can be especially beneficial ifyour Realtor® is on vacation or busy attending to other cli-ents’ needs.

Linda uses virtual assistants as her team. Three sepa-rate people living outside of New Mexico who handle spe-cific areas such as marketing leads, transaction manage-ment, and tracking feedback on showings. Each one is aspecialist in their own field and individual duty, whichallows them to handle each stage of the transaction.Linda keeps in constant touch by phone, instantmessaging, and using her PDA and tablet PC for all elec-tronic requests and generating contracts.

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Get a Broker Who Is BusyAsk your potential broker how many sides they

closed last year and the year before. A “side” is one side ofthe sale. When one Realtor® has the property listing andanother one brings in the buyer, each produces one

“side” when the transaction closes. A broker who hasclosed only four to eight sides in a year is not doingenough business to merit having yours. Either they needmoney, just got started, or can’t get enough business tosurvive and are on their way into another profession. Abroker who has done 15 to 20 sides is not making a greatdeal of money but is surviving and probably growing,and, believe it or not, they’re far above the nationalaverage.

A broker who is doing 30 or more sides a year is verybusy—usually for a reason. They have attracted business,hopefully because they have served people well,although some Realtors® generate lots of business simplythrough smart advertising. It is, therefore, important toget a sense of how many transactions were results of refer-rals from past clients.

Questions to ask a broker:

✓How many sides did you close last year?

✓ Is that usual for you?

✓How many sides did you close the year before?

Now that you know how busy the broker is, ask howmany of those sides were working with sellers and howmany were representing buyers.

✓What percent of your business comes from repre-senting sellers?

✓How much of your business comes from referrals?

✓May I speak with five of your most recent sellers?

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Check Out the Broker’s SpecialtyIf you are selling a home, select a broker who special-

izes in residential sales. If you want to buy an apartmentbuilding or a business, select someone who specializes incommercial sales. There are numerous specialties in realestate, and your broker’s specialty should be consistentwith your goals. In larger metropolitan areas, Realtors®

also tend to specialize in geographic areas, in priceranges, or with certain types of buyers. A broker who pri-marily sells million-dollar homes won’t have the time fora $200,000 home.

Questions to ask:

✓Do you have a specialty?

✓What are the price ranges of the homes you sell?

✓What area/region do you specialize in?

✓Do you sell commercial and residential real estate?

Make Sure the Broker Is Technologically CurrentIn today’s world, it is vitally important to work with

professionals who are computer literate and have a graspon the new gadgets designed to improve service to theircustomers.

Many states require Realtors® to use certain forms inreal estate transactions. These forms are almost alwaysavailable on computer programs, which presents thequickest, most accurate way to generate contracts. Thosewho continue to write their contracts by hand or use atypewriter to fill in the blanks on standard forms are liv-ing in the past, demonstrating an unwillingness to keepup with the times; they may not be capable of providingthe best service.

Other types of software allow Realtors® to track theircustomer’s needs, access increasingly more sophisticatedMLS systems, and communicate by email. Digital

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cameras allow photos and virtual tours of your home,complete with interior and exterior views.

If the real estate broker you are interviewing is notable to utilize a computer, beat a hasty retreat. Make surewhen they say they’re computerized, they’re not just rely-ing on an assistant or a shared secretary to do all the com-puter work for them. Your house should have as muchInternet exposure as possible. Your wonderful homecould be passed over while a competing house that is visi-ble on the Internet is quickly snatched up.

Linda is at the top of her game with regards to currenttechnology. She creates a separate website for each listingand each is featured on a weekly TV show along withbeing included in a full-color magazine ad. ColdwellBanker Legacy has satellite stores in major malls with pic-tures of her properties in order to offer even more expo-sure. Her website is consistently ranked number one onGoogle and Yahoo because of its content, relevantkeywords, and search phrases that consumers use tosearch for homes in Albuquerque. Eighty percent of herhits come from Google, with Yahoo and MSN not farbehind. Linda averages 4,000–5,000 hits per month.

Questions to ask:

✓Can I have your email address?

✓What is the address of your website? Do you havemore than one? What others do you link to? Whatsites link to yours?

✓Will you take digital pictures of my home? Howmany will appear in the MLS and in other market-ing materials? Will you create a virtual tour of myhome?

✓Do you also do print advertising?

✓Can you show me samples of your listings, flyers,ads, and websites?

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✓What are the ways in which you generate leads andhow do those ways relate to each other? In otherwords, what is your marketing plan?

✓What forms do you typically download for use?

✓What other types of technology do you use in yourbusiness?

TrainingAnyone worth their salt in any profession continues

to update their knowledge about the work they do. Doc-tors, lawyers, and mechanics face an ever-changingworld when it comes to their professions and must takeclasses to continue to be of service to their customers.The same is true of Realtors®.

New Mexico state laws require all active and inactiveassociate brokers and qualifying brokers to complete 30credit hours of continuing education in coursesapproved by the commission every three years. GoodRealtors® find the time to take much more training thanthat. There are a number of designations denoting cer-tain continuing education landmarks and they are oftensignified on business cards in the form of letters follow-ing their name. While some may be in areas not relatedto residential sales, all show a commitment on behalf ofthe Realtor® to keep their professional skills honed, andthat’s good. Do not work with someone who demon-strates no interest in continuing education. Look forsome of the following designations on your prospectivebroker’s business card:

GRI—Graduate REALTORS® Institute—representsapproximately 80 hours of advanced education beyondthe training that is required to be licensed. It is usuallythe f i r s t s tep to becoming more informed andprofessional.

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CRS—Certified Residential Specialist—requires com-pletion of numerous two- to three-day classes heldaround the country. It takes the average Realtor® a fewyears to complete and usually costs $5,000 to $10,000 intuition and travel costs. It provides significantlyincreased and detailed knowledge in residential issuesand is the “graduate degree” of residential sales. Gradu-ates are members of the Residential Sales Council (RSC)and receive continuing information in a variety of waysto keep them abreast of new issues in the area.

ALC—Accredited Land Counselor—similar to theCRS, this usually requires several years and several thou-sand dollars to achieve. It’s the “graduate degree” of landsales.

CCIM—Certified Commercial Investment Member—this designates experts in commercial property sales, likeshopping centers and industrial, office and apartmentbuildings. It requires extensive continuing educationand graduates are members of the Commercial SalesCouncil.

e-PRO—Certified Internet Real Estate Professional—this is the only certification program of its kind recog-nized nationwide and endorsed by the National Associa-tion of REALTORS®. Those searching for a Realtor® canhave confidence that e-PRO graduates are savvy with allaspects of the Internet. They not only take the Internet-empowered consumer seriously, they are also able tomeet their online needs.

CyberStar™—An Allen F. Hainge CyberStar™ is oneof an elite group of Realtors® from around the countryand abroad who have proven efficiency in the use of tech-nology and have agreed to serve as teaching profession-als with Allen. They work well with people on theInternet, with email, and in person. They are top produc-ers in their markets, and they have exclusive territories.Their websites are often innovative and provide localinformation as well.

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EcoBroker™ Certified—The EcoBroker™ certifica-tion requires completion of a course of study on healthhazards in homes, remediation services and resources,energy efficiency, and alternative energy systems. AnEcoBroker™ affiliate can boast that 25 percent or more ofits brokers are EcoBroker™ Certified.

There are many other designations. If you see oneyou are not familiar with, ask about it. Most professionalsare proud of their designations and happy to talk aboutthem. After all, they have spent both time and money inmaking themselves better able to serve you.

What Is an EcoBroker™?EcoBroker International is a company that trains Real-

tors® in the advantages of educating both homebuyersand sellers about healthy and energy-efficient homes.The course of instruction takes a broker through healthhazards of homes, such as mold, radon, dirty air ducts,and other unhealthy conditions, and helps them under-stand what mitigation sources are available so this can beshared with their clients. It also covers a variety of energyefficient features that tend to make a home more valu-able (based on the premise that lower energy costs willmake a home more valuable in the market–and morecomfortable to live in). Alternative energy systems arealso explored.

There are numerous national, state, and local organiza-tions that support and provide information on energy effi-ciency in homes. The LEED (Leadership in Energy and Envi-ronmental Design) Green Building Rating System® is avoluntary, consensus-based national standard for develop-ing high-performance, sustainable buildings. Built Green isa term used by numerous private organizations. The Colo-rado organization has one of the easier-to-use checklists. Itis a handy guide for homebuilders, sellers, and buyers onwhat to look for in a home. You can access and download

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the Built Green Checklist at www.builtgreen.org. Energy Staris a government organization that not only provides a simi-lar checklist (although qualifying for an Energy Star ratingis more difficult than Built Green), but it also tests andqualifies home appliances and building materials so thatyou can know what to buy and know in advance of yourpurchase what approximate savings you can realize.Check out the requirements, the qualifying appliances,and a variety of other information on energy efficiency atwww.energystar.gov.

A Realtor® who is EcoBroker™ Certified is better able tohelp you understand (a) if your home already has energyefficiency that should be featured in any marketing and (b)what steps you might take to make your home more energyefficient. If you check the Built Green Checklist at thewebsite above, you will note that many features are simpleto implement and may cost relatively little in comparisonto the additional dollars the changes could bring in a sale.

For example, you do not need to convert a forced airheating system to solar, or even in-floor radiant, althoughsuch changes may, in fact, make a nice difference in thehome. But, simply having the integrity of the air ductstested, and having them cleaned, presents a point that canbe explained in marketing materials. It becomes a more effi-cient and healthier system.

It should be noted that the EcoBroker™ certificationcourse is relatively new, so finding a certified EcoBroker™will be impossible in most areas of the country at this writ-ing. But, if you do find one, be sure that the added knowl-edge could enhance your broker’s ability to help you. Youcan go to the EcoBroker™ website at www.ecobroker.com tosee if there is a broker who is EcoBroker™ Certified near you.

New Mexico’s Basic Licensee DutiesPrior to the time a licensee generates or presents any

written document that has the potential to become an

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Express Written Agreement, the licensee shall disclose inwriting to a prospective buyer, seller, landlord, or tenantthe following list of basic licensee duties that are owed toall customers and clients by all licensees:

• Honesty and reasonable care;

• Compliance with local, state, and federal fair hous-ing and antidiscrimination laws, the New MexicoReal Estate License Law and the Real Estate Com-mission Rules and Regulations, and other applica-ble local, state, and federal laws and regulations;

• Performance of any, and all, oral or written agree-ments made with the licensee’s customer or client;

• Assistance to the licensee’s customer or client incompleting the transaction, unless otherwiseagreed to in writing by the customer or client, in-cluding (a) presentation of all offers or counter-of-fers in a timely manner and (b) assistance in com-plying with the terms and conditions of the con-tract and with the closing of the transaction.

If the licensee in a transaction is not providing the ser-vice, advice, or assistance described in the first two bul-lets, the customer or client must agree in writing that thelicensee is not expected to provide such service, advice,or assistance, and the licensee shall disclose such agree-ment in writing to the other licensees involved in thetransaction. The following is a list of some of thelicensee’s responsibilities:

• Acknowledgment by the licensee that there may bematters related to the transaction that are outsidethe licensee’s knowledge or expertise and that the li-censee will suggest that the customer or client seekexpert advice on these matters;

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• Prompt accounting for all monies or property re-ceived by the licensee;

• Prior to the time the licensee generates or presentsany written document that has the potential to be-come an Express Written Agreement, they mustpresent a written disclosure of (a) any written bro-kerage relationship the licensee has with any otherparties to the transaction and/or (b) any material in-terest or relationship of a business, personal, or fam-ily nature that the broker has in the transaction;

• Disclosure of any adverse material facts actuallyknown by the broker about the property or thetransaction or about the financial ability of the par-ties to the transaction in order to complete it. Ad-verse material facts do not include data from a sexoffender registry of the existence of group homes;

• Maintenance of any confidential informationlearned in the course of any prior agency relation-ship unless the disclosure is with the former client’sconsent or is required by law;

• Unless otherwise authorized in writing, a licenseeshall not disclose to their customer or client duringthe transaction that their seller client or customerhas previously indicated they will accept a salesprice less than the asking or listed price of a prop-erty; that their buyer client or customer has previ-ously indicated they will pay a sales price greaterthan the price submitted in a written offer; the mo-tivation of their client or customer for selling orbuying property; that their seller client or customeror their buyer client or customer will agree to fi-nancing terms other than those offered; or anyother information requested in writing by the bro-

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ker’s customer or client to remain confidential, un-less disclosure is required by law.

The thing to note when reviewing these basic dutiesis that with a written agreement such as a listing agree-ment or buyer broker agreement, you are securing yourprofessional relationship with the broker you are work-ing with. It is important to understand the basic duties aswell as understand that adding the agency relationshipalso adds the element of vicarious liability to therelationship.

AttitudeWe just cannot end this section without a discussion

about attitude and disposition. A good, winning attitudemeans a lot—we would much rather work with a newlylicensed broker who really wants to help than some oldcurmudgeon who has been in the profession for years,thinks they have all the answers, and won’t listen to any-thing new. There are a lot of worn-out real estate brokerswho have “seen it all” still occupying desk space inoffices across the land.

Your initial interview with a prospective broker willtell you a lot about their approach to life. Work with anoptimist not a pessimist. Listen to their answers to yourquestions. You do not want to work with someone whosimply states, “Your house is going to be hard to sell,” butrather with someone who encourages, “It might be diffi-cult to find the right buyer, but I know that the rightexposure can get your house sold.”

It isn’t brain surgery to figure this out; look for agood, positive attitude as part of your evaluation process.

Summary of Recommended QualificationsYour success in selling your home is very dependent

on the quality of the broker you select to represent you in

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that sale. You know that a broker doesn’t get paid until asale occurs. So, would you be concerned if a broker wereunable or afraid to spend the necessary money to prop-erly expose your home to potential buyers? Would yoube concerned if a broker simply put your property listinginto a multiple listing service (MLS), put up a sign, andprayed that it would sell?

In Summit County, Ken has over 600 Realtor® mem-bers in his association. But 90 percent of the real estatetransactions are facilitated by only about 10 percent ofthe brokers. Around half of his brokers sell zero to oneproperties a year. (Of course, many are intentionally part-time.) The membership turns over 25 percent each year.You would be well advised to determine where your bro-ker ranks. This is an important decision. So, here are ourrecommendations. Choose a broker who:

• Knows how to get your home the best exposure.More exposure increases the chances of your homeselling for the best price.

• Has a personal website and that the site is content-rich and places well in the Internet search engines.In 2005, 80 percent of all homebuyers in the UnitedStates started on the Internet. Often, they selectedtheir broker prior to shopping for their home.

• Advertises in print publications. Though not thebest way to obtain buyers, repetition of the com-pany name will create more traffic for all.

• Spends an appropriate amount of money on otheradvertising.

• Produces a virtual tour or slide show of your prop-erty and places it on the Internet for buyers to see.Two-thirds of buyers who viewed properties on theInternet indicated that they look for virtual tours,and all website visitors want to see lots of photos.

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• Knows how to use a camera and uses it frequently.Too many brokers take only one photo of a prop-erty and some take none at all. Digital camerasmake taking photos easy and inexpensive. There isno reason that you should not have the maximumnumber of photos allowed in your MLS listing andmany more on broker and other websites. The onlyexception might be if you were selling a distressedproperty that just did not photograph well at all.

• Believes in continuing education to keep up on thelatest in selling techniques and networking withbrokers locally and in other locales. Most successfulbrokers attend conferences around the countrywhere they meet other brokers, and they then referbusiness to each other.

• Follows through. Would it be important to you toget feedback from your broker along the course ofthe time your house is on the market? Successfulbrokers have mechanisms in place to obtain feed-back from other brokers who show your propertyand pass that information to you. They will alsokeep you abreast of other matters that might affectyour property, its condition, pricing, and so on.

• Covers their market. If a successful broker workswell in the entire geographic market serviced bythe local MLS, it is better to work with that brokerthan one who is less successful, but closer to yourhome.

While no one can guarantee a quick sale, a brokerwho performs with the above qualifications will makeyour selling experience smoother, cause you less anxiety,and provide the highest possibility for a successful sale.

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CommissionsCommissions in this country have historically been

paid out of the proceeds of the sale, so it has been pre-sumed that the seller actually pays those commissions;however, this is not entirely true. Some professionalsbelieve that because it is the buyer who actually brings themoney to the transaction, the buyer pays the commission.

Additionally, new agency laws have started to changethis tradition by stating that any party to a transactionmay pay any broker’s compensation without creating orterminating any agency relationship within that transac-tion. And more importantly, home values are establishedin this country with real estate commissions factored in aspart of the value. That is because home sales have been,and almost always are, handled by real estate brokers. Thecost of that handling becomes part of the ultimate saleprice and value of the home. Therefore, it becomes a mootpoint who pays the commission—it is simply part of thehome value and paid out of the proceeds of the sale.Please be aware that listing commission amounts or per-centages are negotiable, and the form of commissionagreed to may vary as well. There is no “standard” or “nor-mal” commission.

One thing to be aware of is that brokers are notallowed to charge you any fee on top of their commissionunless it is explicitly stated in the contract. Hopefully youwill select a professional Realtor® and therefore avoidthese excess charges, but it is always important to knowyour rights before you enlist any personal representative.

The bottom line is that you should not let the dollaramount of a Realtor’s® commission scare you away. It canbe negotiable and it can be an invaluable investment. Justas in many complex transactions expertise costs money,but it is usually well worth the price.

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How Much Goes to Your Broker?If you feel the listing broker actually gets to keep the

entire listing commission, you haven’t asked enoughquestions. While it is not always the case, it is typical thatthe listing broker offers half their listing commission to abroker working with a buyer who brings in a successfulcontract. Each of those brokers then has to split their por-tion of the commission with their qualifying broker. Thequalifying broker usually incurs the cost of keeping anoffice open, staffed, and equipped, and the qualifying bro-ker’s portion of the listing broker’s split is meant to pay forthat overhead and, hopefully, provide some profit. If yourbroker is the qualifying broker, then they are incurringthose costs themselves.

Studies have shown that the cost of being in businessin real estate can amount to much more than 50 percentof earnings. Now, obviously, a qualifying broker whoseassociate brokers sell less will have a higher percentage ofearnings going to overhead, and one who sells more canexpect less overhead and more profit. It is not unusual forhalf the associate broker’s split to go to the qualifying bro-ker. Many times, that split is structured more in favor ofthe associate broker as their production goes up. But, youcan easily see that your listing broker may only be keepingone-quarter of the listing commission that you are paying,and your broker has additional expenses of their own.Qualifying brokers do not cover all costs. Associate bro-ker’s generally have to provide their own vehicles forshowing (and they cannot be old and run down) and theirown cell phones. They also generally pay their own dues,insurance, continuing education, and at least part of theiradvertising costs.

How important is the sale of your home? Do you wantit sold at the best price and in a timely manner? As withany professional service, you can search for the least

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expensive vendor or you can search for the most qualified.The most qualified will generally cost you more, but youcan often measure the savings. At the very least, you getthe additional peace of mind knowing your are in goodhands.

The DiscountersWe have taken many property listings after they have

been on the market anywhere from three months to ayear or so with a discount, or limited service, broker.What are discount brokers? Well, we believe they areoften the ones who provide “discount services” and whodon’t spend much money or effort getting exposure foryour property. But they are also the ones who advertisethat they will charge you less than anyone else. There areoften a couple of problems associated with such listings.Once the property has spent sufficient time on the mar-ket without a sale, even if it has been priced properly, itmay have to come down in price in order to generatenew interest in the property. There are companies nowthat will take your property listing and not provide anyservice—with the exception of placing the property inthe local MLS. Agents working with buyers are notoffered a cooperative fee split, or if they are, it’s a nomi-nal fee that can be as low as $1.00. So the broker isinstructed to bring their buyer’s offer and to negotiatedirectly with the seller. That buyer’s broker then, in orderto get paid for their work, must write a commission intothe contract or will have to collect it directly from theirbuyer. And if that broker doubts their ability to get paid ifthey sell a property, what do you think are the prospectsof them actually showing it?

In New Mexico, brokers have a separate form that dis-closes to buyers just what they can and cannot say to sell-ers who are FSBO’s or working with a limited-service

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company. The seller is also given this same type of formbut because it is optional, they are not required to sign it,although Linda feels it is a smart thing to do. When enter-ing into a real estate transaction, it is important for allparties to be diligent about contract dates, responsetimes, inspection planning, and so forth. In many lim-ited-sevice brokerage relationships it is prohibited forone broker to contact another or to assist in any of theseprocesses. This can have the potential to seriously hinderthe smoothness of the transaction.

This following point is made by our good friend andpioneer Realtor®, Mollie W. Wasserman, from her latestbook, Ripping the Roof Off Real Estate:

“MLS Entry Only” is one of the biggest travestiesfoisted on the public. Not only is it a legal liability(people think that if you are their broker, you’rerepresenting them, no matter what they sign), itdoesn’t work! That is the big reason I will not offerMLS Entry Only. Despite advertising claims to thecontrary, we know from sales data over the lastcouple of years that MLS Entry Only is usually awaste of money for the vast majority of sellers.The MLS was designed as a co-operative betweenlicensed brokers, not an advertising medium forunrepresented sellers. When the MLS is used as in-tended, brokers know that they will have a li-censed partner on the other side who will notonly provide the fiduciary counsel to their ownclient, but also complete the many tasks requiredof a broker. MLS Entry Only listings notoriouslyget far fewer showings because buyer brokersknow they will have to deal directly with theseller and often have to do the work for bothsides. Because of this, and the lack of fiduciarycounsel, many MLS Entry Only listings do notsell, forcing the seller to then hire a full service

47




broker and forfeit their MLS Entry Only fee. Iftheir home does sell, it usually receives thousandsof dollars less than it should have for being a partyto this consumer rip-off.

Now, consider if you were the buyer and had to payyour broker’s commission on top of paying for the home.You could not include the commission in the financing,because it is not in the purchase price. So, it would beadditional money out of pocket.

If financing were to be part of the deal, you wouldlikely lose that buyer. And if you will be paying thebuyer’s broker directly (usually more than half a “nor-mal” listing commission), you might as well engage a fullservice Realtor® from the beginning, eliminate the head-aches, and have someone capable, willing, and obligatedto provide you with good advice throughout the listingand sale process.

As of this writing, 10 states have passed legislationrequiring licensed real estate brokers to provide a set min-imum amount of service, regardless of what they charge.And a number of additional states are considering similarlegislation. Part of the impetus has been complaints fromhomeowners who did not understand that they wouldhave to do virtually everything in the transaction andpay the fees as well. The Department of Justice has indi-cated that it may take this to court on antitrust grounds,but the National Association of REALTORS® has said itwill aggressively fight for the states and their consumers.

Bundled Service CompaniesA relatively new type of brokerage that offers more

payment choices are those entities called “bundled ser-vice” companies. These are companies that may providethe entire range of real estate service, but let you choosewhich services you want. You may decide, for example,to hold your own open house and do your own

48




advertising, and hence, pay a smaller fee. Ultimately, youget to decide full-service or less. Just be aware of the differ-ences. Accepting less service may save you money, but itplaces added burden on you to create a sale.

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