- Specializing in Real Estate Education Since 1984 -
Differences Between Co-Ops,
Condos and Homes
While there are many differences between a Co-Op and Condo on a variety of fronts, the most important things to remember when deciding between them concerns controls, costs, and tax deduction.
In a Co-Op, you are not really buying an apartment, but, rather, shares in a corporation which owns the building and which gives proprietary leases to its shareholders for apartments, the value of which are represented in the number of shares allocated to them. In effect you are leasing you apartment from the Co-Op. In a condo, you actually purchase your Unit.
As a result, Co-Op boards have much more control over the rights of Co-Op lessees than is the case in a Condo. The most notable one is the right to approve transfers. Under New York State law, absent discrimination or bias based on statuses such as gender, race, religion, sexual preference, etc., the courts will not second guess a Board's decision of whether to approve or disapprove a prospective purchaser.
People who buy Co-Ops do so because they like the idea of buying into vertical "neighborhood" and do not mind ceding some control over their destiny in the name of the common good. Despite a few well publicized "celebrity" rejections, the reality is that most financially and socially responsible purchasers are approved, even in Co-Ops, so long as they show they can afford the carrying costs of the apartment and will not be a nuisance.
Notably, this approval power of the Board is different from a Condominium where, typically, the Board of Managers does not have such power and, at most, has the rarely invoked right of first refusal (a right to purchase the apartment at the same price as agreed to by the purchaser). Thus, Condo purchasers, usually want maximum flexibility and control and pick Condos over Co-Ops largely for that reason.
Full-Service Justifies Full Commission
Defending Your Commission:
More agents strategies for earning a full 6%
Do you have what it takes to outsmart the company who offers a 2, 3 or 4 percent commission? There are ways to get paid a full commission, provided you know what to do and are willing to do it.
In terms of earning a full commission, the first thing to keep in mind is that discount agencies play an important role in meeting the needs of the buying public. No matter what the product, some clients will purchase based exclusively on price. If you're with a full service firm, it's unlikely you will see this business. But what about the bulk of the buying public--what can you do to demonstrate the services you provide are worth a full 6 percent?
Your role as an agents is to assist the seller in obtaining the highest price possible for his/her property in the shortest amount of time. To do this, the seller must have maximum exposure to the market place. Exposing the listing through only one source (I.e. the discounter's Web site) greatly limit's the number of people who will see the property. This means extended market time (and hence more carrying costs.) It also means they will be less likely to receive the highest price possible for their property.
If you're with one of the major brands, make sure each of your listings has a virtual tour plus plenty of pictures posted to your personal Web site, to the company Web site and Realtor.com. If the competitor offers three pictures of their listings, offer 10 to your sellers. A different strategy is to set up a separate Web site for each of your listings. Again, stay completely focused on how to obtain the highest price possible in the shortest amount of time.
A second important difference you can use against some discounters is having a link to your MLS through an IDX or VOW. Visitors come to your Web site to view what's currently available. Many discounters and "by owner sites" only list their own listings and do not provide access to the entire MLS. Buyers "surf" different sites and then return to the sites that provide the most useful information.
Another way to defend your commission is to realistically assess how the local brokerage community reacts to discounters. Over 60 percent of all sales are generated from other agents. Clearly, if the agent population is unwilling to show listings with discounted commissions, many qualified buyers will not see the seller's property. Less exposure results in less purchase price. So how "real" are the so-called seller savings if the seller's property doesn't reach all qualified buyers?
Something else few sellers consider is whether they can select their own agents. In most cases, discounters assign the seller an agent and that is the only choice. Selling your home requires the agent to be a "member of the family" during the sale. A key question to ask the seller is, "Are you willing to sacrifice choosing who will handle the most important investment sale of your life?"
A different strategy, especially when a new discounter opens in your marketplace, is to check the competitor’s Web traffic on www.Alexa.com. The agent who questioned me about how to handle a local discounter working with a 2 percent model could have visited Alexa.com and learned this particular discounter's rank on Alexa was in the 4 million range. (Alexa ranks the top 5 million Web sites in terms of Web traffic--the lower your score the higher your traffic.) Just for comparison, Realtor.com is ranked at 204 while the major brands are ranked in the top 15,000 Web sites. With a ranking of 4 million, virtually no one is visiting this site.
You can beat this squeeze with planning, great technology and superb customer service.
These who are not willing to study, practice
and discipline themselves don't last long.
There's a group of salespeople we call "90-day wonders" because they wonder - after 90 days - why they ever got into this business. They aren't meeting their quotas or reaching their goals. They aren't making any money, and they aren't any closer to success than they were when they started.
Why? They have not attempted to learn the basic skills to equip them for a successful sales career. Saying that they just weren't "born" to be salespeople, they give up and resign themselves to a life of working toward someone else's goals.
Professional salespeople read books, take courses, ask questions, study the techniques of sales leaders, work for their customers and continually strive to outperform themselves. They know what's going on in their market and in the industry. They stay current with the competitive environment. He perennial top producers, they are respected by their peers and superiors, customers and competitors. And as long as they continue to work, study and perform they will lead the field.
However, some habit patterns can cause even the best salespeople to self-destruct. I call these the "Seven Habits of Highly Defective Salespeople".
1. Over-Confidence
Self-confidence is essential for success in sales. It enables us to forge on through the slumps, when it seems that no one is buying and no one will ever buy from us again. But over-confidence in the good times can lull us into believing that times will always be so good. Top performing sales professionals know that the way to ensure that things will be good next quarter is to work this quarter.
2. Time Abuse
The time bandits are out there. Managers, peers, even friends and family members with good intentions often tempt us to spend our time in unproductive ways. Meetings, phone calls, the daily mail, memos and pleasurable activities can divert us from our most important work: work!
In his book, How to Get Control of Your Time and Your Life, Alan Lakein asks what has come to be known as the "Lakein question": "What is the best use of my time right now?" He suggests that you ask yourself that question several times a day. Is rearranging your business card file the best use of your time right now? Is taking a detour by the dry cleaners the best use of your time right now? Is reading this article the best use of your time right now? If not, put it away and go see a prospect. Stay up 30 minutes later than usual tonight, or get up 30 minutes earlier tomorrow to read the rest of it. Most of us have only about six hours of prime selling time each day, and we must guard it against all intruders.
3. Procrastination
Highly Defective Salespeople are masters of procrastination. They often put things off in the interest of not wanting to "inconvenience" prospects and customers: "She's probably at lunch now."..."He's probably gone for the day."..."The weather is awful." ..."I'm too busy."
W. Clement Stone, who began as a shoeshine boy and became a multi-millionaire, credits three words for his tremendous success: Do It Now. He required everyone who worked for him to write those words on index cards and post them wherever they would see them, to program themselves to Do It Now, Make that call now. See that prospect now. Set up that appointment now. Don't put it off until later; later may never arrive.
4. Failure To Communicate
Talking too much, talking too loudly, failing to really listen, using ineffective or inappropriate language, calling only when you want to sell something all of these are forms of miscommunication. Top salespeople spend 80 percent of their time listening, and only 20 percent of their time talking. They spend 80 percent of the talking time asking questions to discover needs.
Effective communicators use specific language: "I'll have it for you Friday," rather than general terms: "...as soon as I can." Never tell a customer, "If you want it in blue, you'll have to wait ten days." Customers don't want to be told what they "have" to do. And they don’t have to wait. They can call you competition! It is much more effective to say, "If you want it in blue, I can deliver it next Tuesday." Tell them what you can do, not what you can't do.
5. Short-Sightedness
When you thumb through your prospect file, do you see targets for quick-hit, one-sale opportunities? Or do you consider each name as an individual with whom you'd like to establish a long term business relationship? How you view your prospects and customers will greatly affect how they respond to you. We've all heard that "People don't care how much you know until they know how much you care about them." Surveys prove that it costs five times more to land a new customer than to keep a satisfied customer. Highly effective salespeople profit in time saved and commissions earned by approaching prospects with the long view in mind and by winning repeat business from existing customers.
6. Loose Lips
"Loose lips sink ships" and sink the otherwise promising careers of Highly Defective Salespeople. Do you sell to customers who compete with each other in the marketplace? If so, you must hold in sacred trust information they share with you. Until your customer’s new product has been introduced publicly, keep to yourself anything you know about it: concept, improvements, rollout date, etc. His proprietary intelligence belongs to him, not to you. Highly defective salespeople have done major damage to themselves and their customers by speaking before they thought. Don’t let it happen to you.
7. Stunted Growth
Just as selling is a lifelong profession, learning must be a lifelong process. Highly defective salespeople quit learning. Zig Ziglar says, "You are what you are, and you are where you are because of what has gone in your mind." You will become the person you want to become and reach higher levels of success by continuing to feed your mind. Take a listening course, listen to cassette tapes on personal relationships, spend one hour a day reading in your field, associate with other successful salespeople.
The first thing you must sell is yourself, so take every opportunity to improve your most important product. Never believe that you have "arrived." The market changes every day. You must advance in personal development or you will be left behind.
The National Association of Realtors attracts over 10,000 new members a month. But close to as many agents wash out and go inactive, most in their first year. Why isn't the success rate higher for new agents? One reason - lack of preparedness - may be the answer. Don't fall into the same abyss as others. What you know in advance can help you ride out the rough spots better than your peers who turn their licenses in after they find real estate sales more difficult than they bargained for.
New agents are often unprepared for being overwhelmed
Many people earn four to seven-year degrees in higher learning institutions to become professionals such as accountants and attorneys. Yet the real estate industry, with few exceptions such as Colorado, turns out agents (salespersons) representing real estate fiduciaries (brokers) with just a few weeks or months of education.
To understate the situation, there is a huge reality gap in what agents learn to pass the licensing test and what they really need to know to make a living.
If you are a new agent, one of the first realities that you have to face is that you won't have enough time to get the experience you need before committing serious, costly errors. To name just a few things that will go wrong under your watch, consumers will test you to your resources' limits. They will use your time, money and gas to look at homes, or ask you to prepare a marketing plan when all they want is data so they can buy or sell a home without you. Murphy's Law will take it from there and interfere with your transactions. Every little thing from oversights on the sellers' disclosure to the insurance company refusing to insure the home to the buyer's credit problems can put the kabosh on what should be a smooth transaction. Even if you are lucky enough to close a home, you might be hauled before an MLS committee and told you have to give up your commission because another agent showed the home to your buyer before your buyer bought the home with you. Or your buyer sues you and your broker because the seller didn't disclose mold in the home. And so on.
That means you have to have more in your arsenal besides your real estate license. You have to develop experience as well as a sixth sense for things that can go wrong, because between the time you meet a new client and get him or her to closing, a million different little things can go wrong. Your job is to prevent problems and expedite the sale while protecting your client's rights, the rights of others and keeping your broker and yourself from liability.
That's what the job really is. It's not sales, it's not helping people with the American dream. You just got a license to handle explosives - so your job is really about damage control.
So, whatever education you got to obtain your license isn't going to be nearly enough. You will need further training if you are going to be good at getting deals to closing and keeping your broker and you out of court.
To manage damage control, you'll have to develop many skills including the following:
- Scripts, overcoming objections, and body language so you have a better shot at getting the listing contract or buyer's agreement, reading buying or selling signals, and knowing when to talk and when to be silent
- Learning to price well so you have credibility with buyers and sellers
- Time management so you can learn shortcuts and avoid timewasters
- Developing contacts so you have mortgage bankers, fix-it people, and others who will help you make the sale
- Educating yourself on the run - put together resources so you can find information quickly on topics that impact your sales
- Finding and identifying cost-effective ways to market your services, listings, and buyers' needs to consumers and other agents
- Contract negotiating techniques so deal points don't become dealbreakers
- Self-defense and personal safety techniques as you will be dealing with the public and with strangers
This brief list gives you an idea of what isn't covered in real estate education classes, but these skills and many more will be as important to you as anything you learned to pass your real estate licensing exam.
There are only so many hours in the day, and if you are lucky enough to report to work on your first day with a contract to sell a home in your hand, you still won't be paid a dime until the home closes in four to six weeks, if it closes on time. All of your working activities that first day and thereafter have to be balanced between getting new business and retaining the business you have - keeping the deal you're working on from falling through.
So while you are dividing your day into getting new business and keeping the business you have, make time for continuing education. Take classes, read articles, attend meetings at your MLS or association, hire a coach, and ask questions of other agents and brokers by the water cooler.
Learn not just by asking for help, but by offering to help. Offer to sit an open house for a top agent in exchange for some pointers or letting you shadow for a day. Offer to babysit listings for agents who want to take a short vacation. Offer to take buyers out to look at homes for agents and offer the agents referral fees for business they don't want or can't get to.
You can devote a little time each day to rounding out your own list of what you need to do to get and keep business, but be sure to make time for some of the items listed above. Then you'll find that your new real estate career is easier to balance, and balance is the key to keeping you off the inactive list.
