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Home>Business Resource Center >Industry Solutions >Realestate

The word "realtor" describes only one aspect of working in the real estate industry. Professionals who own their companies must have a firm grasp on every element that impacts operations - whether the commodity is land, housing or commercial property. The sections that follow span a broad spectrum of subjects key to growing a healthy business.

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• The Agent Ratings Ship Has Sailed
  

  By Teresa Boardman

  I used to say that agent rating and reviews were inevitable and should be embraced.

  “Bring it on,” I said. “Rate me.”

  Now I am saying, “Forget it.”

  The ratings ship has already sailed. Ratings have lost credibility as businesses game the system, and companies that publish ratings and reviews extort businesses.

  Public agent reviews and rating sites seemed like a necessary step for consumers. But they are probably better off choosing a real estate agent the old-fashioned way — by interviewing the agent, asking for references and asking for recommendations from friends and family.

  There are companies that charge agents to have bad ratings removed from rating sites. Other companies use agent ratings as a way to get agents to send traffic to their websites, so they can build traffic and charge more to agents who want to advertise on the site.

  I know there is one site where I can pay to be the expert by buying a ZIP code. The agent who pays the premium fee gets to be the expert. They even get little gold stars on their profile. It’s easy to buy client testimonials, too.

  On one site, I rate very low as an agent. I have never been able to figure out why, but it shows that I have sold only three houses. The number never changes and ratings on the site give me a low score in working with buyers, too.

  I tried to opt out of the site but was unable to. The site doesn’t get enough traffic to impact my business. Perhaps we need a website where we can look up rating and review Web sites. Each site could be given an accuracy rating.

  The National Association of Realtors has started a pilot program for agent ratings. My local association is involved in the pilot and looking for agents to volunteer to join. I decided not to participate.

  NAR says agent ratings could help raise standards. Really? I thought we were held to the highest standard by our code of ethics.

  I don’t think people are going to believe or trust ratings from Realtor associations. I would love to know what standards need to be raised.

  Is this about agents answering the phone? Wouldn’t it be easier just to give members a list of specific deficiencies and have us all work on improving them?

  Real estate and real estate licensing is regulated at the state level. Legislation is easiest and fastest way to raise industry standards.

  NAR claims that there will not be any way to game their rating system. There is always a way to game the system. If a bad review is going to hurt my ability to make a living, I will game the system.

  Are Realtor associations really going to allow bad reviews of dues-paying members to be displayed on a website, when our code of ethics prevents us from saying anything negative about one another?

  We need to somehow get back to the idea that real estate agents represent buyers and sellers.

  Sure it’s possible for an agent to do a lousy job, but it is also possible for buyers or sellers to do a lousy job. Unfortunately, when that happens, it’s the agent that gets the bad review — not the buyers or sellers.

  Our associations should be more like a trade association, and stop trying to play the role of regulatory agency or consumer advocate. Realtor associations are not there to support consumers — they exist for agents, and we fund them.

  Problems with reviews and ratings are not limited to the real estate industry. I have talked with restaurant owners and small business people who are not at all happy with various websites that have reviews. On one site, the good reviews are suppressed unless the business advertises on the site. Then the best ratings are allowed to come to the top.

  It’s one thing to rely on online reviews and the words of total strangers when buying a burger, and quite another to rely on reviews when hiring an agent or contractor.

  The best recommendations for a real estate agent come from friends, family and neighbors. That is our rating system. We don’t get repeat business or referrals unless we do a good job.

  Are their bad agents out there working with clients? Sure there are. And there are bad school teachers, corrupt police officers, crooked politicians and negligent doctors and nurses too. There are school bus drivers who drink or do drugs, and hair stylists who cut hair too short.

  Any time a job is done by a human being there is a chance that it will be done wrong. The good news is that people have the chance to interview real estate agents before signing any kind of a contract with them. I am thankful that I have the opportunity to interview my clients before I sign anything.

  Teresa Boardman is a broker in St. Paul, Minn., and founder of the St. Paul Real Estate blog.

  Source: InmanNEWS, May 9, 2013 (http://www.inman.com)

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• Reesio Rolls Out Transaction Management for Brokers
  

  Design modeled on Facebook, Pinterest

  By Andrea V. Brambila, Associate Editor, Inman News

  San Francisco-based startup Reesio officially debuted a transaction management product for real estate brokers today that the company hopes will fuel exponential growth.

  Reaslo Inc., which does business as Reesio, is a real estate technology company and a licensed California brokerage founded in January 2012.

  Originally designed to help for-sale-by-owner sellers advertise their properties on local multiple listing services, Reesio soon switched its business model to offer its platform exclusively to real estate agents.

  After taking its platform nationwide in November, Reasio is now reaching out to those who manage agents: real estate brokers.

  More than 300 agents have signed up for Reesio’s platform since its official launch last fall, but the company sensed an expansion opportunity when it also received what Mark Thomas, Reesio’s co-founder and CEO, described as “a tremendous amount of inquiries from brokers.”

  “These brokers liked the design and look and feel of our product, but of course, they needed added features that let them manage their agents’ transactions,” Thomas said in a statement. “We had brokers with 50, 100, and even 250 agents that we had to turn away because we didn’t have a product that they wanted. Now, we can serve that group.”

  With Reesio’s agent platform, both buyer’s agents and listing agents can create transactions and invite clients and other parties, such as a loan officer or the agent on the other side of the deal.

  Reesio sets up a checklist of common tasks that need to be completed during a transaction, which agents can then customize by adding or subtracting tasks. From this workflow, the platform prompts agents to upload relevant documents that the parties can then review and e-sign within Reesio’s cloud-based dashboard.

  The platform automatically notifies the parties of what they need to do next and lets them know what the others have done. Activity is time-stamped and the parties can send each other in-system messages.

  With the new broker offering, instead of agents creating their own workflows, brokers can create them for their agents, making sure they follow specific steps throughout a transaction.

  “Given the liability that brokers have for their agents’ actions, this gives brokers an added peace of mind,” Reesio said.

   

  Broker dashboards are modeled on the layout of Facebook Timeline. Brokers can upload a cover photo and logo. They can also create workflow templates for agents or assign them to one of two included default templates: one for buyer’s agents and one for listing agents.

  An activity feed allows brokers to see when transactions have been created. Brokers can view a list of their agents’ transactions through a Pinterest-like image gallery and go to each transaction to check its progress, review documents, and send their agents messages.

  Agents and brokers who create Reesio accounts can also search for and join brokerages that have already been created by previous users or create a new brokerage account if one has yet to be created. Brokers are responsible for adding and approving agent members.

  Reesio’s pricing for individual users starts at $20 per month or $195 per year and goes down depending on the number of users a brokerage has, the company said. Originally $49 per month at the time of the platform’s national launch, the company almost immediately changed the pricing to match that of its rivals, Thomas said.

  Reesio’s direct competitors are companies like dotloop and Cartavi, each of which provide a paperless transaction management platform for real estate professionals.

  For brokers, Reesio offers an enhanced billing feature that automatically calculates a multi-agent pricing discount, if available, without the need to contact a Reesio sales representative.

  “This lets brokers jump right in and sign everyone up in their brokerage quickly and easily,” The company said. “It also gives Reesio an edge because most of its competitors require brokers to manually contact their companies’ sales representatives to find out what the multi-agent discount is — an oftentimes painful and arduous process.”

  At the moment, a discount kicks in at 20 agents, though that may go down to 10 agents in the future, Thomas said. According to the National Association of Realtors, the typical brokerage consists of 23 agents and brokers. At that size, a brokerage could expect a monthly cost of $19 or so per month, Thomas said.

  The company claims its $195-per-year price point is actually cheaper than its competitors, particularly since Reesio does not require a separate subscription for e-signatures. DocuSign’s e-signing service has been incorporated into the Reesio platform for nearly a year, though that is about to change.

  As of May 20, Reesio will switch to HelloSign, the e-signature service from electronic fax company HelloFax Inc. Thomas said he thought the product, user experience, and cost were better with HelloSign.

  It also helped that HelloSign is a startup “focused on working with other startups,” Thomas said.

  Earlier this month, Reesio was accepted into the 500 Startups Accelerator, a startup-incubation program run by big-name investors. The company’s selection was a sign that investors are increasingly eyeing the real estate technology space, which is attracting more interest since the successful initial public offerings of companies like Zillow and Trulia.

  Along with its acceptance into the program, Reesio received $50,000 from 500 Startups, adding to the $70,000 it had already raised from angel investors. The company intends to close a seed round of between $500,000 and $1 million by the end of July or August, Thomas said.

  In the meantime, the company hopes to roll out three main features in the next three or four months. These include public transaction pages where, for instance, listing agents can post disclosures for view by multiple buyer’s agents. Listing agents would include a link to the public page in the local MLS.

  In the long term, Thomas envisions these public transaction pages perhaps even taking the place of the MLS in this role.

  “Possibly if people really like the look and feel of that public page, maybe people will start using that instead of uploading disclosures to the MLS. A lot of MLSs are kind of clunky. If it’s well-designed, easy to use, crisp and clear, that’s a better experience,” he said.

  A second feature Reesio plans to incorporate is the ability for users to upload document templates and prepopulate them within the platform, rather than users having to enter information using a different product, such as zipForm, Thomas said.

  Reesio also plans to build a tool within the platform that will allow users to submit, accept, counter, or reject offers.

  These additional features will help establish Reesio as the “social hub for all things real estate,” Thomas said.

  Source: Inman News, April 23, 2013 (http://www.inman.com)

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• Buying a House? Selling? They Can Do Your Taxes, Too
  

  By Elizabeth A. Harris

  While browsing through real estate agencies in New York City, a little déjà vu can be unavoidable. There’s a Corcoran Group over here, a Century 21 over there, a Douglas Elliman up ahead — and why look, there’s another Corcoran.

  But before national chains and sprawling franchises gobbled up so many peddlers of leases and deeds, there was real variety to be found, not only among companies, but also within them, because some local real estate agencies were outfitted with multiple hats. Apartment rentals and sales might share billing on a single storefront with a notary public, an insurance broker, a travel agent or all of the above. And perhaps the most enduring of these old-fashioned partnerships was a real estate agency that was also a place where you could do your income taxes.

  “How long will this take?” Joseph Bove said when asked about his work processing taxes for his family’s business, Bove Real Estate. “I’m in the middle of tax season.”

  As real estate has become more competitive in recent decades and the business increasingly specialized, many of these little partnerships have dried up. In some areas outside Manhattan, however, especially where real estate prices are less astronomical, these cross-pollinated agencies are not entirely gone.

  “I try to supplement my income with a little bit here, a little bit there,” said Joseph Fabrizio, owner of Top Realty Company in Ridgewood, Queens, a company founded by his father in the 1960s. “I became the tax preparer and the real estate broker. And I’m also a funeral director.”

  Those who offer both a real estate agency and tax preparation services say that the combination increases foot traffic, and that clients can be easily shared and referred back and forth between the businesses without either side being robbed of their lunch. Sometimes, the arrangement is a matter of two businesses splitting the office and the rent, and in other instances, one person, or one family, is behind every door.

  “Ula’s Real Estate,” reads one of the many signs hanging from a storefront at Greenpoint Avenue and Leonard Street in Brooklyn. The same sign concludes, with the perplexing non sequitur, “Income tax.”

  It is a husband-and-wife team, where he sells insurance and does taxes, and she, along with their daughter, does real estate.

  “There is a synergy between the businesses,” Alexander Doukhowetzky, the husband portion of the team, said last week as he sat in his office, a narrow room stuffed with clients, manila folders and a small brindle dog named Cobra, who was merrily shredding a stuffed animal. His wife, Ursula Doukhowetzky, opened the real estate portion of the business first, he said, and they added the accounting services soon after.

  “My wife is an extrovert and I’m an introvert,” said Mr. Doukhowetzky, who speaks Russian, Polish, English and Farsi, a natural fit for a long-Polish and Eastern European neighborhood, aside from the Farsi. “So real estate suits her, and more technical stuff suits me.”

  About five years ago, 22 years into the life of their business, they set up a second office a few blocks away where the real estate business is now based, but they still cross-pollinate with referral business and signs.

  In some cases, the practice of families’ splitting various duties behind a single sign stretches back decades.

  “That’s how it was since 1946 when my father and uncle started it,” Mr. Bove said of Bove Real Estate. Today, his son, Alphonse, handles the real estate, and father and son do the taxes. The elder Mr. Bove’s wife, Michelle, runs a travel agency, Bove Travel, right upstairs.

  Mitchell Moss, a professor of urban policy and planning at New York University, said that the practice of local real estate agencies’ doing double or triple duty had been hammered in recent years. Specialized national and international chains have swallowed large areas of the real estate market. Companies like H&R Block and programs like TurboTax have sucked away much of basic tax preparation. And even the business of notaries public has largely moved to the inside of banks.

  These businesses, he said in an e-mail, are “increasingly a relic of specialization and globalization.”

  So much so, it turns out, that real estate professionals at some major New York City firms, and even the National Association of Realtors, have never heard of such hybridized agencies.

  Aroza Sanjana, president of Warren Lewis Sotheby’s International Realty, said that while she was aware of these companies — she used one to do her taxes years ago, she said — she did not consider including their extra services when she took over the Warren Lewis brokerage.

  “It dilutes our brand to have any other businesses,” Ms. Sanjana said. “In this market, as competitive as it is, and with as many people in real estate as there are, you can’t afford to give less to that one task. We need all hands on one deck.”

  On the other hand, Gus Perry, principal broker of Stein-Perry Real Estate in Washington Heights, which was recently acquired by Halstead Property, said he saw the virtues of the arrangement, having rented out office space to two tax preparers over the years. Nonetheless, that is about to come to an end.

  “Now, with this new Halstead merger, we need the space,” Mr. Perry said. “We’re looking to grow.”

  And so his tenant of three years, Ira Stein (no relation to the Stein of Mr. Perry’s firm), will have to start a new search for a slice of uptown office space.

  “If someone is selling bagels, you don’t want to be in there doing tax returns,” Mr. Stein said. “I was looking for something semiprofessional and real estate caught my eye,” he continued. “I would have liked to stay here a little longer.”

  Source: The New York Times, April 8, 2013 (http://www.nytimes.com)

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• Local Realtor States Homes with Gender Specific Preferences in Mind
  

  By Francine Grinnell

  CLIFTON PARK — Prudential Manor Homes real estate agent Sheri Pennartz has put a lot of thought into what coming home means to different people.

  Having lived on three other continents with her husband and two sons, the Clifton Park resident understands the relocation experience that families encounter, and is ready to help. Acknowledged by her peers with the President’s Award for sales achieved in 2012, she knows firsthand the importance of finding the perfect community, homes and schools for those moving to the area.

  Pennartz believes that gender specific needs factor into home sales. She observes that male preferences can often be lost in the design process in a new construction as well as in the presentation of an existing home for sale.

  Referencing the book “Men Are from Mars, Women Are from Venus,” by John Gray, Pennartz has developed methods to make these varying responses to a space coexist harmoniously. “She wants a big tub to soak in, he wants a three car garage. We find a way to meet in the middle.”

  Her solution applies design fundamentals of feng shui with the recurring patterns observed as she has assisted both with male and female clients.

  Feng shui is the Chinese discipline of correct placement, whether within the physical home or the land surrounding it. Pennartz states that feng shui in a home begins with the home seller.

  “When the market dropped after 2006, people wanted and had to move because of the economy. The houses left had to become more marketable and competitive. Some needed updating. The avocado colored appliances and small pink mosaic bathroom tiles need to go. What stood out was whether I was representing a log cabin, a fine home valued at $400,000 and above, or a condo, things can be done to create a warm, welcoming impression from the moment you enter. When having your home staged, remember to appeal to both sexes “ Pennartz said.

  Pennartz lived in Germany, Taiwan and Israel before settling in Clifton Park 10 years ago.

  “People are moving globally. Here in Clifton Park and the surrounding areas, we are seeing a new diversity of people arriving to work at Global Foundries” she said. “Many of the male clients I am working with are single and have unique requirements that differ from a family man.”

  Pennartz’ certificate in staging made her aware of taking into account buyer demographics, buying psychology, and to utilize design elements in planning out the rooms and space and the use of lighting and its effect on a space. “Don’t be afraid to let a buyer or seller know if the home is leaning too far on the woman’s side. Women tend to look for cozier settings or rooms that facilitate intimate conversations, while males gravitate toward rooms with gadgets, televisions and electronics,” she said.

  Open spaces and higher ceilings are a draw for men psychologically; they have a greater sense of personal space. Professional stagers with men in mind try to create rooms where a man can feel as if he can walk through the house easily without stepping around all sorts of furniture.

  Visuals matter. “When it comes to men, the garage and yard tend to be high up on the priority list, so it’s important to get these areas as perfect as possible. Garages with painted walls, clean floors and enough storage for male-oriented hobbies can impress. Shelf space is looked at as a good thing, as is a place to hang tools or a workbench. An empty garage looks much bigger than one with a car parked in it,” she said.

  With the yard, a well-maintained lawn will help sell the male. Thick, healthy grass, minimal bushes to trim and easy to clean garden beds will meet the curb appeal requirements the male buyer looks for.

  “Appealing to both sexes when staging and selling a home requires an emotional investment that will pay off in the end for all parties, just don’t forget that men need a connection, too,” said Pennartz.

  Source: CNWeekly.com, southern Saratoga County, New York, March 28, 2013 (http://www.cnweekly.com)

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• Helping Brokers in Need
  

  By Carmel Melouney

  “The perception of a real-estate broker is very skewed, especially in New York,” says Patricia Frank. “People assume you’re living the high life, but not everyone out there is making million-dollar deals.”

  Ms. Frank would know: As the executive director of the Realty Foundation of New York, she’s the one brokers turn to when they are desperate for cash.

  The foundation was formed in 1954 by such real-estate titans as Harry Helmsley, Jack Weiler and William Zeckenforf Sr., who were concerned about the number of brokers living on the edge.

  “They got together and said, ‘‘This guy needs a new suit,’ or, ‘We need to help somebody with his rent,’ and that’s how it started,” says Ms. Frank.

  The foundation’s membership includes 75 prominent real-estate companies and individuals, who pay $5,000 annually. It has distributed $3.15 million to 840 “indigent” brokers and provided 1,545 college scholarships totaling $3.9 million to children of employees of member firms.

  Applications swelled during the recent downturn. In 2009, the foundation gave awards ranging from between $10,000 and $20,000 to more than 30 brokers. In 2010 and 2011, it helped 20 brokers annually and last year the figure declined to 15.

  Foundation officials say that applications for help have slowed but that could change quickly. “It’s very unpredictable when you’re dealing with large commissions and not getting a salary,” says Jerry L. Cohen, the foundation’s chairman.

  The application process is confidential. Ms. Frank, who has worked for the foundation for 19 years, is the only one who knows the broker’s identity.

  One of the brokers assisted last year was a 51-year-old Manhattan resident with a son in college who agreed to speak to The Wall Street Journal if his name wasn’t used. He said he works for a leading brokerage firm and he had four deals collapse in 45 days before he applied for help.

  “Our livelihood is feast or famine,” said the broker, who received $10,000. “Pre-2006, I’d see five deals and close three. Today, I have to see 12 to 15 to close three.”

  A 70-year-old independent broker also received $10,000 last year. “When I spoke to Patricia, there was nowhere else to go,” said the broker who has been in the industry for nearly 40 years.

  Source: The Wall Street Journal, March 10, 2013 (http://online.wsj.com)

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• Housing as an Investment? Yes, That Idea Is Back
  

  By Roben Farzad

  Should you look at housing as a (good) investment?

  For the love of five years of foreclosures, bank failures, and congressional testimonies, have we learned nothing? Bobcats and coyotes, after all, were taking over condemned houses with antifreeze-green pools. That’s pretty Mad Max where I come from.

  Don’t look now, but with the sector resurgent—prices for single-family homes climbed in 88 percent of U.S. cities in the fourth quarter—the idea of “house as nest egg” is making a comeback. The most recent national median price for an existing single-family home is about $179,000, a 10 percent rise from a year earlier, which was the biggest gain since 2005, according to the National Association of Realtors.

  Still, Yale professor and home-price tracker Robert Shiller says housing remains a pretty crummy investment over the long run. He calculated (PDF) that real (after-inflation) home-price appreciation from 1890 to 1990 was approximately zero percent. “Housing,” he told Bloomberg TV, “takes maintenance, it depreciates, it goes out of style. All of those are problems. And there’s technical progress in housing. So new ones are better.”

  He continued: “So why was it considered an investment? That was a fad. That was an idea that took hold in the early 2000s. And I don’t expect it to come back. Not with the same force.” The professor then compared the idea of investing in housing to investing in cars: “Buy a car, mothball it, and sell it in 20 years. Obviously not a good idea because people won’t want our cars. It’s the same with our houses. So they’re not really an investment vehicle.”

  Those in the industry don’t buy that analysis. “The key to evaluating housing from an investment standpoint is to understand what gives real estate its value,” says Andrew Jeffery, a director of acquisitions for Cirios, a San Francisco residential property investment shop. “Shiller misses the point by comparing investing in houses to investing in cars. Houses, and all real estate, have the potential to generate cash flow. Cars do not. The value of a property is derived from what multiple the market assigns this cash flow, which is based on a variety of factors, from location to property type and tenant profile.”

  He says many homeowners—present and prospective—simply view homes as assets whose price appreciates and depreciates with market conditions, ignoring their key potential to throw off cash. Also, Jeffery says it’s critical for investors to grasp how leverage works in housing. Think about it: You put down $110,000 on a $540,000 house. If the value jumps to $650,000 when you’re ready to sell, you’ve effectively used debt to double your initial investment. Of course, interest payments and upkeep eat into that profit, and too many people know the pain of owing more on their mortgages than their homes are worth. But the tax deductibility of mortgages mitigates the risks.

  Jeffery says that thanks to leverage, a person who buys a house and rents it out will come out ahead of someone who invests the same amount of money in the stock market—especially at the point when the incoming rent covers maintenance outlays and helps pay off the mortgage. Going by historical data, by the time the owner retires, the house should be worth more than what equities would have returned. Plus, he says, “You’d already own your cash-flowing fixed income assets to retire on.”

  There is, of course, that holistic way of looking at housing: as an investment that at least holds its value as inflation rises, and whose dividends—a home office, kids playing in the backyard, school bus around the corner—pay out big, however nonfinancially.

  Source: Bloomberg Businessweek, February 13, 2013 (http://www.businessweek.com)

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