Northern California Real Estate
Recreational And Estate Properties
We have been doing this since 1976
Types of Real Estate Agents
When you are looking for an agent or responding to an ad, who answers your call may not be the most qualified. Do not be afraid to ask questions about them and their experience. There are many good agents.
The old rule of thumb is that 20% of the sales force sells 80% of the inventory. The 80% then sells 20%. In the real estate business, it is worse. In 1990, there were about 2,900 agents in the MLS system. By 1996 it was about 2,100. Those 800 have not been missed. In 2005 We went back up to about 4,100 agents. We are heading down towards about 3,000 now
My most recent report shows that 10% of the sales force sold 88% of the inventory. Their average sales volume was $6,442,451.
In this top 10%, only 18% had a balanced approach which had been weighted within 25% of dollar volume between representing both buyers and sellers. In talking to other agents, I discovered some agents do not like the responsibility of having listings. Taking good care of listings is a lot of work.
Several of the top producers have several “assistants” which are licensed people who funnel their activities through their team leader who gets credit for their volume. They tend to be listing agents as buyers are not typically comfortable with this approach. These producers will typically take a wide variety listing. A primary tool to obtain listings may be following up on expired listings. They are usually proud of handling over 100 transactions a year. Their listing volume will usually exceed their sales volume by three to one or more.
The other 90% sold 12% of the inventory which is about $97,477 each. Obviously, there are A LOT OF PART TIME PEOPLE which skewers the numbers.
There were only seven agents from the Russian River north on the top 10%.
Agents usually break down into these broad categories:25% OF listings coming to market are now at a less than usual commission. The math becomes interesting:
TEAMS who are primarily listing agents often producing over 100 transactions a year. Strong, self-promoters.
BOUTIQUE who work a specific type, such as B&B or commercial or country. They usually cover a large area.
FULL TIME and usually area bound. Mostly residential, but willing to try anything.
PART TIME will always be in an office. Never on their own. Since they do not want to admit they are part time, it is hard to identify them.
NEW AND OR STARVING will be the most common users of low commissions to entice Seller's to list with them.
| $600,000 | Sale Price | $600,000 |
| X 6% | Commission % | X 5% |
| $36,000 | Commission | $30,000 |
| $18,000 | to selling office | $15,000 |
| $18,000 | to listing office | $15,000 |
| $11,900 | typical split to agents | $10,500 |
| difference | - $1,400 |
If you think agents do not avoid properties with low commissions, I am sorry.
QUESTIONS:
How long have you been in the real estate business?
Full time?
What geographic area do you concentrate on?
What type of inventory are you most comfortable with? Why?
What was your income last year? What is it usually?
Have you ever been sued? Why?
Do you have a web site? Is it one done by address? This is not a negative but it is provided by a vendor who specializes in this and is not a great indication of a lot of marketing expertise.
Where do you advertise?
What is your weakest point? Your strongest?
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