Listen with webreader

I met Althea Garner almost five years ago on Ryze, and she’s been one of my best friends and ardent supporters ever since. Hers is an interesting tale of relocating from Zimbabwe many years ago and having to struggle to have success in America. But successful she is, and since I’ve known her, this is probably her third or fourth business. Truthfully, five questions probably isn’t enough to learn everything about her that could help, but it’s our format, so here goes:

1. What is House Of Homes Online?

House of Homes Online is an Real Estate portal, where buyers, sellers and investors of residential property can go to:

a] search for properties for sale, foreclosures and short sales
b] see what is already on the market in their area and obtain ‘comparable’ pricing
c] obtain topical information on area, schools, crime, business, etc (demographics)
d] obtain home-related tips and tricks and benefit from discounts on home repairs and maintenance
e] find updates to the law in their area and tips on property-related accounting (CPA) tips and to learn from any lawsuits or late-breaking news issues (from qualified experts).

2. What made you decide to go into this business?

I have been a single parent most of my adult life and now that the kids are grown (gee, I even have an adult grandson!), it’s hard to get out of the habit of striving for success! I first went into real estate in Africa in the early ’80′s and did well, but with the recession – and having two sons, for whom I was sole supporter, I had to trade my dream for a steady income and opted for a career in technology to get us through. That lasted for 23 wonderfully successful years – when the kids were grown, I was able to follow my dream again and re-entered real estate here in California.

I love property. I believe that it is the soundest investment that we can make in a lifetime and even though the picture looks bleak right now, compared with what property cost in the ’70′s and ’80′s, it has still appreciated – even with these depressed market prices Most people look at property and assume that if they don’t make a profit in the first 6 months (‘Fix and Flip’), then it is not a good investment! WRONG! If a delicious, light and fluffy chocolate cake takes 25 minutes to bake to perfection, try taking it out of the oven after 10 minutes and tell me that it was a successful venture!

3. What types of challenges have you had along the way?

I entered the property market here in 2005, when the market was bouyant and a buyer was qualified for a loan if they could fog a mirror! Unfortunately, that was the year that I knew nothing! By the time I had gained enough experience to put a deal together (and understand that things are very different here, to what they were in Africa), the market had changed. We had slipped from a sellers market to a buyers market and deals were hard to contract.

Another problem that we have is that everyone and his dog is a ‘Realtor’! If the person you are speaking to does not have a real estate license, then his wife/son/ nephew/friend/boss (you get the picture) DOES! All these people, while not in full-time employment, nibble at the fringes of our livelihood. To be honest, I have a problem with CPA’s, Attorneys and Mortgage Brokers selling property – I wouldn’t attempt to process someone’s taxes – wouldn’t attempt to defend someone in Court and certainly wouldn’t quote on loans, so why do these professions involve themselves in property negotiations on behalf of clients? Realistically, if you required brain surgery, would you go to a lawn mower mechanic who moonlighted as a brain surgeon? I think not!

There is a BIG difference between a real estate agent and a REALTOR(R). A REALTOR(R) is one who is approved by (and in good standing with) their local MLS Board, and is a member of their State and National Real Estate Association. This means that we are regulated and must perform within the bounds and legality of those organizations.

These afiliations come with a cost. Let’s be honest….. being a REALTOR(R) is a costly business and if it’s not advertising and marketing, it’s Board fees or services etc, but it ALL costs a huge amount of money.

In order to be a successful REALTOR(R), you have to have the capital to back you and keeping that capital available is a challenge.

The other challenge we have is being undercut. The question I am asked a lot is: “Since I have to take a drop in profit on the sale of my property because of the failing market, why can’t you take a drop in commission?” Well, firstly, it’s not commission – it’s a brokerage fee. This means that the percentage quoted, is paid by Escrow, to the Broker – not the agent. From this, is deducted costs, such as desk fees, phone charges, E&O insurance (at a $1,000/year) AND Brokerage fees. Depending how good one is as an agent, the agent might get only 50% of the gross fee or as much as 100% – but then the costs have to come off that. When a seller looks at 3 or 4% ‘commission’, this could be as low as $1,000 to the agent from which the agent still has to pay for the marketing of the property!

If the property is listed for less, the agent is already accepting less because the percentage makes it relative – sellers choose not to see this.

A seller who offers 2% to the buyers agent, is just asking to languish on the market, because like it or not, the buyers agents show clients properties that pay 3% (industry standard) and upwards. That’s just a fact of life! So while the listing agent is paying for advertising and marketing of that listing, it doesn’t have a hope of selling, because no selling agent will show it!

Educating the seller is only part of the challenge, but if we can get the seller to understand that agents don’t compete with agents – properties compete with properties – we’d all do business!

Finally, agents don’t ask questions to pry! Every question we ask is designed to qualify or disqualify the property/ies that we show them. If a buyer has seen 40 properties and is tired of the sub-standard properties that they are seeing, they have not been honest with their agent. Only through blatant honesty, can the agent get a clear picture of what the client wants. Asking for a brand new 3,000 sq ft loft with a sea view in Virginia Beach for $15,000 and holding the agent responsible for not finding it, is also not reasonable, but we get a lot of that!

4. Have the positives outweighed the negatives, and if so, how?

Oh, yes! We meet some AWESOME people along the way and helping people to realize their dreams comes with all sorts of warm fuzzy feelings! Honestly, if an agent sees negatives, they’re in the wrong business, because real estate is full of positives!

In the time that I have been back in real estate, I have seen children born in homes bought through me, newly established couples buying first homes, weddings at homes I have sold, upgrades to bigger, better properties, down grades for empty-nesters and even properties that have changed hands because they were willed by the deceased to the family.

It’s all good!

True, right now we have the high foreclosure market, but as a certified Foreclosure Prevention Specialist (FHA/HUD) I have saved more homes than were lost! I don’t prey on others misfortunes, to earn a buck!

5. What would you recommend for anyone looking to go into business for themselves?

I would tell them: Don’t think that you are going to put through your first sale in 12 weeks! Have sufficient capital to carry you through two years (minimum) of no income (even if you DO contract immediately), while still having enough money to advertise and market your listings. Remember: listing a property involves more than just sticking a ‘For Sale’ sign in the ground! There’s a WHOLE lot more to it than that, in order to properly service your client!

AND! …… Being an agent requires a lot more than the fact that you love looking at property! Believe me: you’ll get sick of looking at property within the first week! Ask yourself if you can withstand making 2 hours of cold calls a day and being rejected. hung up and cussed at by 90% of them – 350 days of the year? Ask yourself if you are prepared to work 16 hours a day and 7 days a week, without complaint, for three months before your first day off? That’s what an agent must do to become successful. Whoever told you that real estate involves 3 hours a day 5 days a week, is a liar! Sure, you’ll get there eventually, but even the chef must peel potatoes and swab floors!

It takes money to make money and this business is no different to any other, so stop deluding yourself – it’s hard, costly work!

Before you throw in your salaried position for real estate, tag along with an agent on Open House and start by being the one who jumps in and out of the car to put up the signs! The good part about it is that you’ll lose weight – some of those signs don’t go into the hard ground as easily as you thought! And just when you are exhausted, standing all day with a smile on your face for visitors, prepare to jump in and out of the car to pick up your signs! If you don’t, the City will confiscate them and you will have to pay up to $50 per sign to get them back (and subsequent fines can be up to $200 per sign!)

Being a REALTOR(R) means putting your own feelings aside and seeing only the needs of the client AND performing your fiduciary duty for them. Being a REALTOR(R) means learning to say ‘No’ to anything that even remotely resembles fraud, no matter how hungry you are! To be a REALTOR(R), you need to be self motivated, disciplined and organized to a fault.

And now you know why we earn the ‘Big Bucks’? LOL

Copyright protected by Digiprove © 2011 Mitch  Mitchell