How Do Real Estate Agents Get Paid?

I've started writing about common questions that buyers and sellers have, and, believe it or not, how we get paid is still one of them.  To understand the payment process, we first have to go over the legalities of licensing.  Each real estate company has one broker for legal purposes.  At Pearce, for example, I'm that person.  All agents at Pearce "hang" their licenses with us, although some of them are salespeople (who must work for a broker), and some are brokers themselves (who could work independently or can work for another broker).  Over 90% of real estate companies across the country have fewer than ten agents, and the broker sells him- or herself.  That makes Pearce Real Estate one of the largest firms in the State, and across the country.  The principles of agency, however, are the same regardless of size.  It's also useful to note what Realtor designates (and it needs a trademark sign, which is above my pay grade on a computer!):  It means that the company, and therefore all of its agents, belong to the National Association of Realtors, agree to abide by its Code of Ethics, and can participate in the Multiple Listing Service (MLS).  Most local firms are Realtor firms if they sell residential real estate, and, increasingly, commercial firms are not. We are, and we handle both types of property.

When a seller signs a listing agreement, or a buyer signs a buyer broker agreement (and those two contracts are basically equivalent), they sign with the broker in charge.  Only the broker in charge sets the rules--commission rates and terms--or can legally change or cancel the agreement.  Most compensation is offered through the MLS:  When a listing is posted there, it has a BBC (Buyer Broker Commission) offered, and the listing firm is required to pay that amount to the broker who represents the buyer, unless a change is agreed to by both firms, or firm if it is a sale with both brokers at the same company (which we call an "in-house" sale).   In order to have an in-house sale, both buyer and seller must sign a Dual Agency agreement.

When the property closes,in most cases, the closing attorney makes out a check or checks to the brokerage firm--checks cannot be made out to individual agents.  Firms differ widely in the way they compensate agents within their firms, both in the percentage of the check that goes to the agent, and in what expenses they pay toward the transactions.  In addition, some (usually national) firms also charge buyers and sellers "transaction fees", which are paid on top of the commission, and go only to the real estate company. In some cases, the commission is divided evenly between the listing side of the transaction and the selling side.  Increasingly, the listing firm keeps a higher amount, and offers a BBC that is less than half of the total.

Agents are legally independent contractors, so they don't get a salary, or a regular paycheck.  They earn money only when property closes or rents, and they share that with their firm.  It used to be that the firm got half and the agent got half, but now it can vary.  Some companies pay higher amounts (sometimes much higher percentages) to the agent, but often charge them for their desk, their postage, their copies, and their marketing.  Many transaction-related expenses are borne by the agent personally.  If he or she takes you to lunch, that comes out of his or her pocket.  If a problem arises during the selling process, and is paid for by the broker, that is also often coming out of the agent's share.  If you were referred to your agent or agency by another real estate agent or company, either here or somewhere else, that agent's firm can be receiving up to half of the total amount paid.

If all of this is making you feel as though the poor agent is at the bottom of the heap, you could be right, especially if you don't end up selling or buying, and they get nothing for all of their work.  What my goal is, however, is to make you understand what they make, and when, and to help you appreciate their excellent efforts on your behalf!

Handling Multiple Offers

The first thing buyers probably want to know is why we have so many multiple offers, when the real estate market doesn't seem overheated?  The answer is that consumers today know the market very well, often as well as their agents do.  They have been to many open houses and/or showings, and they have a sense of how quickly a home will sell.  We advise sellers, in the pursuit of a high selling price, to price their homes in the sweet spot--i.e., where the buyers will perceive that they need to make a good offer right away, if they want to get that house.  Since many properties on the market are overpriced, those homes priced aggressively stand out, and buyers know that.

So, here we are.  We have a new listing, priced to sell, and three different sets of buyers have made offers.  What do we do now?  The most important realization for most people is that the seller is in control.  The agent advises, but there is no law on how to handle multiple offers, so s/he can accept any of them, ask for each of them to present a new offer, or simply state what they would take, and sign with the first party who agrees.  If I am allowed to give advice, I tell people to negotiate with one party at a time (especially since the only real danger in multiple offers is that the seller might inadvertently accept more than one, or the buyer might have offers accepted on more than one home, if they are not paying attention to the details).  It might be the highest price, but it's also possible that it's the cleanest offer with the fewest contingencies, an offer without a mortgage requirement, or an early closing date.  If you are the buyer, then, you should make the cleanest offer that you possibly can.

Many times the agent asks each of the bidders to come in with their "highest and best" offer.  In that case, I tell people to offer the highest price that they would be sorry not to have bid, if someone else got it for that amount.  That means, of course, that buyers shouldn't be sorry if they went as high as they could afford to go.  In a multiple offer situation, buyers should not expect, however, to be able to renegotiate much, if at all, after inspections.  When there's another buyer, or buyers, in the picture, the advantage here goes to the seller.  Also, in a multiple bidding environment, you should not count on a Hubbard clause to win the bid, since a clean offer will almost always beat it. 

The last important note to strike is that it's very common for buyers to doubt that other offers exist, or that they are being treated fairly.  Agents, in my experience, don't lie about other bidders, nor do they do anything that would interfere with the seller getting the best offer (which may, of course, not be the highest in dollar terms).  Most Realtors are very careful to give the same information and opportunity to all parties, since we are bound by the Code of Ethics to treat all parties fairly, and to act in the best interest of our client.  No one is happy to lose a bid, but it can happen under the best of circumstances, and buyers should learn from any mistakes (like delaying), and move on. 

For Sellers:  Price to sell, and be fair to everyone.  Don't be greedy.
For Buyers:  Do your homework ahead of time--know your limits and your preferences.  Act quickly!

A Different Market

All real estate markets are variable, as are all cycles.  What applies to one property may not apply to another.  Yet there are usually certain truisms that stand out at any given time.  So what are we seeing now?

First of all, inventories have tightened in almost every segment.  There just isn't as much on the market.  Good properties can get snapped up almost instantly, sometimes with multiple offers.  This is particularly true on the lower end of the price continuum.

Secondly, rates have been rising, meaning that time is of the essence.  If you are able to afford a home now, don't wait.  It will cost you more every month in the future, if rates go up further, and inflation is a real fear in this economy.  Even if you are downsizing, money is cheaper to borrow currently.

Thirdly, sellers (who tend to be older than buyers) value different things than do buyers (who tend to be younger).  There is often renegotiation that takes place after the inspections, not because the home is falling apart, but because the buyer intends to do work that the seller might not think is necessary, and which, indeed, may not be.  A seller shouldn't be surprised if a buyer is looking to change the floor pattern, bathrooms, security system, or appliances.  As a seller, you don't have to participate in those choices, unless you want to sell your home to that buyer.  There is an exception here--multiple offers reduce the cost of renegotiation, by changing the power dynamics.

Multiple offers still tend to come on properties that are very well priced, and also on those that are in move-in condition.  Prepping the house well for sale helps with that, as does making your offering price so attractive that more than one party will bid, often above asking.  Not only does that drive up the final sales price, but it cuts down on give backs, since buyers know they are competing.

If you are trading up to a larger and/or more expensive home, you may be better off than those trading down.  Not only is supply more plentiful, but carrying costs are a real concern for many people, and bigger homes can sell at discounts that smaller homes would not have to face.  This provides a real opportunity for those who are willing and able to purchase a large home, and those buyers can end up with a lot for their money.  In addition, they will start with more money, since the smaller home that they are selling is probably increasing faster than the larger one they are seeking to buy.  Every market has pockets of opportunity, and this is one--go over $1,000,000 for the best value.

Finally, don't expect this market to change rapidly.  Every other part of the country has already seen declining and tight inventory, and therefore rising prices.  If it is starting to happen here, remember that it is just starting.  And adjust your expectations--then make your move!

Be Prepared to Jump

One of the toughest things for us to combat over the past few years has been the sense that buyers have had, that they can take all the time they want to, while making decisions.  It seemed to many that, not only would the same property be available, but that others that might be as good or better would come along all the time.  That made it difficult to put transactions together.

Now we seem to be joining the rest of the country in having low inventory.  In many price ranges, there simply isn't enough available to satisfy the demand.  This is particularly true at the first-time homebuyer price points.  In some places around the country, time on the market is measured in hours, or perhaps in days.  We're not used to that here, to say the least.

Buyers need to get ready to make decisions on homes that they see, before others make offers, or at the same time.  It helps to have a list of things that must be true about a new home you would buy, in order of how important each item is.  It's also really useful to rank each home as you see it, and, while remembering that nothing is perfect, to eliminate any that do not bump off any of your current top three choices.

Sometimes, it can be crucial to have someone on hand to evaluate changes or additions that you would require, and get a price right away.  Arranging inspections quickly can also give you an advantage, as well of course as a prequalification.  The most important factor, however, is your own willingness to pull the trigger.  More people regret not making an offer in time, than they do those that they make.

This is the point at which I come back to one of my favorite pieces of advice:  Bid the amount that you would be unhappy to hear that it sold for, to someone else.  That's your true estimate of the property's value to you.  And be prepared to come to that number in relatively short order.  That's becoming more important every day in our current market.

Be Open to Listening to Your Realtor

We all know that lots of people don't listen very well.  It's also true that sometimes others talk about things without knowing much about the subject.  And sometimes, you may know more about something than the person who is trying to educate you.  However, most of the time when you hire an expert, you do so because you are interested in what they have to say about their field of expertise.  Part of why you have engaged them is so that you can benefit from their knowledge, even if all you are doing is confirming your own hypotheses.

As Realtors, our job is to give people the best advice and information we have about how to sell or buy a property.  What we tell others comes from experience, from "inside" information from within our companies or our industry, and from the collective wisdom of those in our firms and contacts.  It may not always be correct, but it usually has some data points behind it, and it is gathered and disseminated with the best of intentions.  Often it is more up to date than what is available through public records, or even appraisal firms.

Therefore, it's always surprising to us that people who come to us for help then ignore advice, or even argue with us.  I've been working in real estate for a long time, and the following have all been said to me within the fairly recent past:
"I'm going to tell you what we should do, that I heard from a person next to me on a plane yesterday, but I don't have time to listen to your answer";
"You might learn something about your field from me";
"Do you have anything to say that is worth my listening to?  I'm busy doing something else right now." (This from a person who picked the time of the call).
"I hear you, but I'm depending upon the statue of St. Joseph that I buried in my backyard". (This house did sell.)
And the most common:  "This isn't what happens in Austin/Boston/Charlotte/Denver...." or "I've done this before, and you need to ask more and leave room to bargain" or "offer less, and leave room to bargain".

You get the idea. One of our key tasks is to listen closely to your wants and needs, so we aren't asking you to do anything we shouldn't also be doing ourselves. We don't claim that we are infallible or that we have all the answers, but it's usually worth listening to your Realtor, and being sure that you heard what he/she said, and not what you wanted to hear, before you decide that you know better.  We do have recent market data and statistics, lots of experience, and are clearly vested in the success of the transaction, since that's how we get paid.  The final decision is always yours, but it's best to make it with the most professional input at your disposal.

Stark Company Realtors : Timing is Everything

The following is from Stark Company Realtors.  For more information about the following newsletter or to view properties in South Central Wisconsin, please visit their website by clicking here



Millennials Catch Up

We've all been reading for the past few years about how millennials are slow to leave home, slow to find a career, slow to get married, and slow to buy houses.  In addition, there has been a lot of speculation that they would never embrace some of those things the way that their parents and grandparents did.  Even if they wanted to buy homes, the story went, they have too much student debt to do so, and a generational disinclination to suburbs and investment in real estate in general.

Lately, it seems as though the pundits spoke too soon.  Now the theory is that, while the average 30-year-old has had eight jobs, and while millennials have reason to distrust corporate America, given what happened to many of their parents in the most recent downturn and the one before that one, he or she is not so different from earlier 30-year-olds, or at least from those having children.  They seem to want to buy homes, and even homes in the suburbs, once they start having kids.  While walkability is desirable for them, and puts places with amenities within walking distance at a premium, they own cars, and want to own houses also.

When the Gen Xers and Yers reached this point, they were not interested in homes that needed updating or redecorating.  They wanted everything to be perfect.  The millennial generation, which grew up on HGTV, is much more likely to undertake those types of projects.  In fact, their interest in having balanced lives and healthy lifestyles will make it easier for them to spend the time at home that DIY undertakings require; even professional help means that you need to take the time to hire and manage it, and this generation is willing to do that. 

All of this is good news for sellers, who have struggled with the dilemma of whether or not to fix up homes before selling them, knowing that they could guess wrongly about the taste or budget of a buyer.  Now it seems possible to show potential, and leave the rest up to the buyers.  Reports from recent weekends have indicated that there are lines out the door at open houses in some parts of our region, made up both of first-time homebuyers and downsizing boomers.  Maybe both of those groups will finally rejuvenate the stock of homes being vacated by seniors.  They might have to, if demand goes up enough, and if they end up competing against each other for the listings that are out there.  Now that would be a welcome problem for Realtors in Connecticut!

Our Changing Sales Calendar

The rule in residential real estate has always been that people look at homes in the spring, and close and move in the summer, so that they can begin a new school year on time.  That cycle has worked well for sellers, who can then avoid fixing up or showing their properties in bad weather, so they get their homes ready in early spring, list in May, and move in midsummer. 

With fewer school-age children in the State, and more flexibility, this seasonal certainty has begun to change, especially near universities and hospitals. Those two categories work on a fiscal year, usually from July to June. They typically make their offers during the early part of the year, and get answers by early spring.  That means that, during the period when people are considering offers in and around New Haven, there is very little available and on the market.  This can lead to frustration, but it can also be good news for sellers who have their houses ready to go in late winter. 

Every year, I listen to agents say in February and March that they have nothing to show relocating families.  Every year, I tell agents to remind folks of this fact, and to get listings sooner.  Now we have proof, since we got a report of our website hits over the past 52 weeks.  Surprisingly, the highest number of unique visitors came in---drumroll, please--late January!  That continued into early March, and then settled down, before dropping to lower points in midsummer and late fall. 

So why not aim to have your property listed when the most potential buyers are looking?  We know that weather is a factor, but internal decluttering--the biggest issue for most people--can be done in any season, and why not do it when going outdoors is so much less tempting?  Internet etailing has taught us that the smartest sellers give the buyers what they want, when they want it.  In this case, that means that they'd like more choice earlier in the calendar year.  While some may be willing to wait until the traditional season, this really is a case where the early bird catches the worm!

Happy New Year!

We in real estate are looking forward to a very happy 2016, for several reasons. First of all, it may sound counterintuitive, but having the Fed raise rates slightly is almost always good for business. People just don't seem to take the threat of higher mortgage rates seriously, until they actually begin to go up. That tends to make buyers much more motivated to buy in the short run, as opposed to what they have been doing, which is a lot of looking, waiting, and looking some more.

Another sign of hope is the lack of inventory in some price ranges, and the number of first-time homebuyers out there. As millennials marry and have children, they (often with the help of their parents) will buy homes. Up until now, they've been happy renters. In our area, the math clearly suggests that buying is better. Soon, a new generation will agree.

Locally, we can probably thank GE, but the Governor has definitely gotten the message that residents have choices about where to live, and they have been voting with their feet. The attention on our loss of population, jobs, and allure is getting our state to the point where it feels it needs to respond. And, if it does, more renters who own property elsewhere may buy here, also or instead.

All of these factors make me optimistic for 2016, but, in order for me to be correct, many of you have to agree. Here's hoping that you do!

Real Estate, The Fed, and You

The Chairwoman of the Federal Reserve has been making serious noises about raising the cost of funds, and causing interest rates to rise at long last.  Although the timing is not certain, it does seem clear that rising rates should start by the middle of this year.  Obviously, that is big news for real estate, since mortgage rates direct affect sales of properties; as the cost of monthly ownership goes up, people can afford to pay less for the home or building, and the number of people who can qualify at all goes down. Clearly, although there are broad signs of economic improvement across most of the country, the Fed is worried about disturbing the fragile real estate recovery, and rightly so.  However, rates have been so low for so long that there seems to be no other alternative, so the question is simply when it will happen.


The funny thing about the effect of rising mortgage rates on real estate is that buyers don't seem to be spurred by talk of rising rates.  Until rates actually go up--then they rush to act.  Therefore, in a way, rates going up will help us, since our problem locally is that languishing prices have caused buyers to hesitate and dither, since they don't seem to be worried that anything they are considering will get sold while they are on hold.  Once they see the consequences of having waited, they begin to feel some urgency.  And that causes bidding wars, competition, and, ultimately, rising prices.  The buyers then face a double whammy, of rising mortgage costs and increased sales prices.  So why don't they act before this begins to happen?  Only specialists in consumer behavior know!

What To Do About Low First Offers

One of the most frustrating situations for real estate agents is how to advise buyers and sellers about making or responding to the first offer on a home.  It doesn't come up all the time, because some homes are clearly going to move quickly, and some are so obviously priced to sell that buyers know that they cannot play around.  However, it happens more than one might think, that the buyers put in (usually with advice from outsiders and not from real estate professionals) an offer so far below the asking price that sellers are insulted, and often do not even counter it.

It's a little baffling as to why this should be so common, because I've written many times about buyers knowing what homes are worth, from doing their internet research and seeing so many that are for sale.  The buyers should have a pretty good idea, in many cases, about not only what the property is worth, but about what it will fetch on the open market (although those numbers are arguably the same, we all know exceptions).  Yet somehow, they frequently come in with a first offer twenty or more percent below that figure.  Sometimes, it's because they like the house, but can't really afford it, so they are taking a flyer, much like applying to a "reach" college.  Lot of times, though, they are hoping that they can reap the benefit of a still-depressed market, and get a bargain.

While bargains do occur, sellers also know, in many cases, what they think their home will bring.  Putting in a very low offer insults them, both from the point of view that they think their home is desirable, and should be appreciated as such, and also because they think buyers are trying to take advantage of them.  Our job then is to get them to look beyond those feelings, and deal with what's on the table.

 So many people think that the price ultimately paid will fall in the middle between the asking price and the first offer that we wonder why--how is real estate different from any other field in that regard?  Plenty of other things sell at the asking price, or near it.  However, there is a common perception that, if you lower your price up front, you will get less in the end. Again, why?  No one forces a seller to take a particular offer.  While you can always hold firm, holding firm at the asking price means that you think it will sell for that.  Unless you are confident, and your Realtor agrees, you should counter at some number--it doesn't have to be far below asking, just enough to keep the ball rolling.  We need something to work with, and we need the buyer to stay interested.  It's just the fact, unfortunately, that you can't make the buyers' first offer for them.  Remember, though, that it's often the second round that indicates what they really think, and how high they can really go.  And it's easier to get another offer, if other agents and clients know that someone is serious enough to bid.  It deals with the current problem that buyers think everything will still be for sale when they are ready to act.  Wouldn't it be nice for sellers if that weren't true?

Live Time Chat

As we tread further into the brave new world of digital marketing, we try new ways of reaching and serving our clients all the time.  This week, we have begun offering "live time chat" on our Pearce website.  People who log onto our site between 8 AM and 1 AM will see a pop-up box after they begin browsing, that will offer them the chance to talk to a person immediately.  While that person is not an agent, and will ultimately be referring certain questions to our offices during business hours, it represents our latest attempt to give buyers and sellers what they want, when they want it.

It's certainly been a long journey since the days when buyers had to come into a physical real estate office, and sit down with an agent to go through "the book".  That was the MLS compendium of currently listed real estate properties, and it came out every two weeks, with the latest in inventory available twice a month.  Twice a year, we could buy a book that had the sales for the past six months chronicled for our use.  We didn't give out maps or addresses of listed properties, and most information we did give out was only available on little cards, that we kept in a little box that looked like something in which you would store recipes. It seems strange now, but it was what we had, and it seemed normal to us!

We've gone all the way in the other direction now, and you can find out almost anything about a property, currently listed or not, with the flick of a finger on a mouse.  It may not all be accurate, but it is readily available.  Real estate agents, on the other hand, have morphed too; they've become consultants and counselors.  They no longer control the information, but they are adept at interpreting it, as well as in streamlining the process of buying or selling.

So, if you are scrolling the internet at midnight, and you happen to talk to our live receptionist, think for a moment of how much things have changed!  And how much they still remain the same--we're still here to help you in any way we can, to make the very best real estate decisions for you, your families, and your firms.

Where are the Young Real Estate Agents?

We spent a good deal of the morning brainstorming about recruiting.  Nationally, and for us, the average real estate agent is in his/her late 50s.  Since the market is now being driven by first-time homebuyers, and since they are mostly in their 20s and 30s, there is a disconnect between professionals and  clients.  Most of the agents are digital immigrants, and might have kids the same age as the buyers, so it would certainly be good to develop a pool of younger agents.  Younger buyers, and sellers, have vastly different expectations about technology, about time, about how to shop for anything, and about risk.

When we thought about recruiting agents to match this profile, we realized that there are many aspects of a real estate career that would appeal to Gen Xers and Millenials.  Unlike the Greatest Generation, they aren't expecting one steady career for a lifetime, so the ups and downs of a commission-based agent wouldn't necessarily trouble them.  Unlike older workers, they aren't tied to an office or a standard work day--they could start at noon if they were serving sellers and buyers who shared their hours!  They wouldn't be limited to two weeks of vacation every year, and their dress code would be flexible.  In all those ways, it's a perfect career for a younger person.  And, if their parents have to support them in this job market, as they graduate and look for work, why not enter a field where hiring--and potential--are unlimited?

Learning from Ebay

I'm not an Ebay person, but I have lots of friends who are, and I've certainly read enough about the philosophy to get the idea.  You go on looking for something, and then you watch the bidding over a period of time.  In the end, if you want to get something, you pay the price that it takes to get it.  If you can't stand watching others bid, you take the "Buy It Now" option.

There's a real estate theory along the same lines.  When a house is listed, potential buyers look, and note the price.  They often sit back and watch the action, sometimes bidding, but often waiting.  If they really, really want just that house, they will go in early and strong, and close the deal.  If not, they wait and see.  At the end of their search, if that's the house they want, they need to outbid others to get it.

The idea is that things will sell, in most cases, for what they're worth.  There may be times when sellers get lucky, or buyers do, because of circumstances not created by them, but by the other party.  Most of the time, property goes for its fair value, because bidders will eventually come in and pay what they know it's worth. The moral?  It's not the listing price, it's the inherent value.  Put your property on low, and let buyers bid it up.  Just as in Ebay, if you can create a feeding frenzy, you will get more, and much more quickly, than if you list it too high.

Seller Concessions

One of the new realities of the current real estate market is that buyers often ask for concessions, monetary and otherwise, from sellers.  It used to be that they asked for things to be included or fixed, based on the inspection.  Now, they also may ask for the seller to pay some or all of the closing costs.  This is often so that the purchase price is higher, and allows them to qualify for a higher mortgage amount.

We have seen some issues at the closing with these requests.  The sellers don't always seem to realize that the purchase price will be the basis for the conveyance tax, the land records, and the commission.  It's the amount at the top of the sales contract that governs all those amounts.  We, for instance,  have other brokers to pay in almost all cases.  Sometimes it's a referral, sometimes a co-broke, either inside or outside the company.  The commission offered is on the full amount, and we are responsible for it, whether or not the seller made concessions.  While I understand why sellers wouldn't always like that, I don't see the difference between a concession made in cash or at closing from a concession made during inspections or even during negotiations.  It happens, and it isn't our fault.  And we shouldn't have to take the co-broke commission difference out of our pocket.

There are a lot of ways to get upset during the length of a sales transaction.  But, please, don't shoot the messenger.  We're trying to help.

Real Estate Around the Country

I just returned from my semi-annual meeting with other large independent brokers from around the country. This time, we met at Lake Lanier in North Georgia. The weather was great, but the real estate climate is, in some respects, sobering. National experts are saying that equal supply and demand and a "normal" market may come as late as 2015. Sales for the first quarter were down around the country, in double digits. Some of that was weather-related, but the rest is still about jobs and financing issues.

There is a silver lining, though, and it's a big one. The interesting news was that prices of sold properties were up by a fraction, 1% or so. This is counterintuitive, if you think about the effect of foreclosed properties and short sales on the value of homes. What it seems to suggest is that it is the best homes (not the most expensive, but the most desirable homes in every price category) that are moving. What that means for sellers is that homes must be put on the market at levels that seem to be good values.

What it means for buyers is even more important. There aren't great bargains out there, at least on homes that are well priced and well maintained. Putting in a lowball offer isn't going to result in a purchase. It goes back to the old saying "You get what you pay for". If you want it, you're going to have to buy it at its value, and not at a fraction.

We just had an offer on a commercial property with a listing price of $2.1 million. Someone submitted an offer of $700,000. That's just wasting everyone's time. The statistics seem to indicate that the short sales and foreclosures aren't yet changing prices on regular properties, and given what we are experiencing in delays on such sales, we can vouch for that. Those things are backed up in the pipeline. What's moving through are the good deals, but they are good deals at good prices, not bargain basement fire sales. Buyers should assume that they won't get what they want if they insist on bottom fishing. It may be a sport, but it's not a strategy.

Listings Flying Off the Shelf

After a long, long, long winter, we're seeing signs of spring! And that includes the spring market. I'm starting to get lots of calls from people connected to Yale, who've gotten their job offers and are beginning to look for housing here. We are entering lots of new listings into the system--several dozen in New Haven alone last month. And, at long last, some of the suburban inventory is moving. I heard last week that a spate of sales in Pine Orchard has reduced the available inventory drastically. Even things that have been for sale for a very long time have gone on deposit. That's good news for sellers, who have been consoling themselves with the thought that nothing was selling, while they sat with their houses unsold. If they aren't going now, it's time to re-examine the price, because we're experiencing a boost that should help everyone. And it's about time!

Referrals Everywhere

It's been a busy few weeks for people calling me to ask for help in selling real estate here and elsewhere. After all the talk about the Internet as a way to sell real estate oneself, and all the fears about the demise of our profession, it's heartening to see how many buyers and sellers out there know that they can use our help profitably. Even though all the studies show that the vast majority of transactions are done through real estate companies, there is a perception that that time has passed. It is true that the information buyers need can now be found online in many cases. What isn't true is that buyers don't need assistance in interpreting the data, in learning about a region, and in structuring an offer. And sellers are much the same. I've heard some talk about using Zillow to price a property, although it is very unreliable in certain areas. I've also known people who do their own marketing and even open houses. Much more often, though, I've heard people say how much they value having an intermediary in the negotiations, especially when they know the other party. What would seem to be an advantage--familiarity with the other side--makes most sellers and buyers very uncomfortable. The addition of professionals is highly comforting. At a time when saving money is chic, the use of real estate agents and agencies is a clear sign of their value. And you get what you pay for. As they say about lawyers ("he who represents himself has a fool for a client"), so goes the saying for sellers and buyers.

Almost Too Late to Beat the Spring Rush

Everyone knows that more homes get listed and sold in the spring season, mostly because of school schedules. People either start jobs at the start of an academic year, or want to have their kids into new schools by September. What isn't as settled by all experts is the ideal time in which to list during that season.

I'm a firm believer in the earlier, the better. It's hard to know exactly when the market will pop, but there are certainly signs already--lots of ads, lots of open houses, lots of calls. If you are a seller, you want to have your home on the market before all of the sales activity really begins. It takes time to get the paperwork processed, get the home ready, and set a price. If possible, you want to list before the vast majority of people do, so that early lookers will see your home when there aren't as many places from which to choose.

We don't know when the snow will stop for good, nor when the temperatures will really start to climb. We do know the school vacation schedule, the holiday schedule (and Easter is very late this year), and the traditional boom times. In our company, we believe this: It's best to begin right now. If you are thinking of selling, call your agent today!

Waiting for Spring

While I am snowed (or iced) in tonight--again!--I am thinking once again about how happy I am that real estate is not as time sensitive as some other industries. If you had a restaurant this week, or a theater, or an airline, you would be losing revenue that wouldn't be replaced, in many cases. With real estate, it's different. I was looking at Google Analytics tonight, which tells us how many people look at http://www.hpearce.com/, and from what sites those people reach us, and it was amazing. Every snowstorm for the past month had a huge spike upward, showing us that prospective buyers and sellers are using the downtime we've all experienced when there just isn't anything to do in all this snow, and they are using it to look for real estate on the Web. They can't get out to look at property (we didn't even officially open our offices today, preferring to leave the roads to those who absolutely need to get to work), but they certainly are thinking about it.

That's great news for us. We already know that a bad, snowy winter is usually devoid of sales, but that it is generally followed by a robust spring market. All that searching on the internet, and all that time cooped up inside, leads to a frenzy of springtime real estate activity. If that's the normal pattern, what on earth will we see this spring? Real estate flying off the MLS in April and May, we hope! So, if you are a potential seller, use this indoor time to de-clutter your home and do all those fix-it projects. If you are a potential buyer, keep surfing the net--we'll be waiting for you when the sun shines!