The Competent Broker Now Free for Our Readers

Competence and Integrity in Real Estate?

I first published The Competent Broker four years ago on Amazon.  You can still find it there.  But now, I am pleased to bring it, in full, to readers of this website.

I think the best thing I can say about this book is that:  Brokers hate it.  Well most brokers hate it.  There are a handful of brokers who really love it.  Those are the type of brokers we need.

You can find a chapter-by-chapter summary here.  And find the full, unabridged text here.

Please share widely.  A link back to this site would be greatly appreciated.

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No Shopping

A Modern Real Estate Fable

Imagine if you will, a large townhouse community, in a Raleigh suburb.  All the units are the same.  Same age, same size, same floor plan, all two stories, etc.  The only difference in the units is any interior updates that the owners may have done in the ten years since it was built.

And of course, after ten years, the owners are starting to see an increasing number of units come on the market for sale.  Not surprisingly, the asking prices are all very similar, and so are the sales prices.

Now Joe has been living here since the place was built.  But his employer just went bankrupt and Joe's pretty much been living paycheck to paycheck.  So he too wants to sell.  And fast.  First he thinks, well I'll just underprice my selling neighbors, and I'll get a quick sale.  But he can't afford to lower his asking price too much, because he needs the money.  But then Joe thinks, my goodness, maybe some of my selling competitors need the money too.  I cannot afford for any of them to undercut my price, after I undercut their's.

So Joe thinks very hard and comes up with a...solution.

Now Romeo and Juliet are a young newlywed couple on a tight budget.  They've been watching this townhouse community, but realistically it is simply out of their price range.  But they continue to keep an eye on it.  And when they see Joe's for sale sign, they are the first phone call he gets.

Joe  Yes, it is for sale.  No, that is all I can tell you.  First you must sign my Non-Disclosure Agreement.

R&J  Well we never heard of such.  Why is that?

Joe  It is very simple.  As I am sure you are aware, a number of my neighbors also have their homes for sale.  And I just don't want you, or any other potential buyer, to discuss my asking price and terms with any of my competitors.

R&J  Well okay.  Seems unnecessary, but okay.

So Romeo and Juliet sign the NDA, Joe shows them the home, and gives them a very comprehensive selling package, which of course, includes his asking price.  All of which is covered by his even more comprehensive NDA.

Afterwards...

Juliet  Well, it's just like all the others.

Romeo  But it is $25,000 cheaper.

Juliet  Yes, but can you believe how he's finished the place.  We'll have to spend at least that much on the walls, the flooring, the baths, and the kitchen.  Maybe even more.

Romeo  Hmm, let's go back and look at that other unit we really liked.

So they go back to see Fred's unit.

Fred  So you've come back.  Are you ready to make an offer?

R&J  But Fred, we've already told you that we cannot meet your price.

Fred  Yes, I'm pretty firm on that.  But it's right about the same as everyone else here.

Romeo  Well actually...

But Juliet cuts him off...

Juliet  No Romeo, we cannot discuss that.

Fred is somewhat perplexed.  But hey, kids these days.

Afterwards...

Romeo  We should be able to tell him that he's not the same as everyone else.

Juliet  But we agreed not to.

Romeo  So we'll just have to make Fred an offer at the lower price and see what happens.

And they do.

Fred  I told you kids that my price was firm.  Why are you wasting my time, and your time, with this offer?

R&J  Very sorry Fred, but that is the best we can do.

Afterwards...

Romeo  If we could just explain to Fred, I'm sure he would come down.  He seems like a reasonable person.

Juliet  Well, we did not have to sign that NDA.  We did that voluntarily.  Next time we will know better.  In the meantime, I think I'll write to the North Carolina Real Estate Commission and ask them to look into it.

Romeo  Hey, that's a great idea!  Their job is to protect the public.

But when the NCREC gets wind of this, they love Joe's idea.  After all, we are here to protect the consumer.  And sellers are consumers too.  It is none of Fred's business what Joe is asking for his competing unit.  We must protect Joe.  We certainly wouldn't want Fred to suspect that Joe is in any financial difficulty.  That would be unethical.

But we should protect Fred too.  Because actually it is also none of Joe's business what Fred is asking.  Joe should not have the ability to undercut Fred.  Joe needs to price his unit based on his own individual judgment and what he, alone, is willing to accept.  Not what his competitors may or may not be willing to accept.  That too would be unethical.

But why go through all that hassle with the Non-Disclosure Agreement?  No, no, what we are going to do is institute a rule that says our licensees may not disclose the details of any seller's asking price and terms to any competing seller.  Buyers should not be able to negotiate with a seller by using the asking price of any competing seller.  That is patently unethical and we are just not going to allow it.  It will be a No Shopping rule for buyers.

That way, Fred and Joe, and all of their other competing sellers are protected from all those predatory buyers.  And from each other.

So here is the rule they came up with:

21 NCAC 58A .0115b  DISCLOSURE OF ASKING TERMS PROHIBITED

A broker shall not disclose the price or other material terms contained in a party's solicitation of offers for purchase, sell, lease, rent, or to option real property to a competing party without the express authority of the party soliciting the offers.

In a Rule Change Announcement in the NCREC Bulletin, the Commission stated, "We take our mission to protect the public interest seriously and we are delighted with the new rule.  We believe it perfectly complements Rule .0115a (formerly .0115)."

In a new section in the Bulletin labeled In the Works, the Commission went on to add, "Later this year we have a major report coming titled How Single-Agent Dual Agency Protects Consumers.  You don't want to miss that one."

Public interest protected.  Check.

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On Female Real Estate Brokers

The top ten reasons to NOT hire a female real estate broker

(David Letterman style)

Ten  She uses scripts.

Nine  She believes that real estate is a sales job.

Eight  She is a terrible manager.  This is particularly relevant if she has a team.

Seven  She lacks technical skills.

Six  She is not business savvy.

Five  She lacks objectivity.

Four  She cares more about her relationships with other brokers than she does about her clients.

Three  She is overly emotional:  Rough and tumble real estate hurts her feelings.

Two  She is so busy acquiring clients that she has very little time for or interest in your transaction.

One  She is afraid of negotiation.  She has spent precious little time on developing this skillset and it scares her to death.

Do men not also suffer from the above faults?  Of course.  But in my experience, women are much more susceptible to these issues than men.  Look, it's a six or seven figure business deal; it should be treated as such.  Now before I am flooded with hate, are there exceptions?  Yes of course, but they are very rare.

This is such a problem that male brokers often end up managing their female counterpart as much as they manage the transaction.  Believe me, managing the female counterpart is a useful skill to develop.

In order to avoid an emotional reaction, one strategy I used was to speak with her as little as possible.  Keep it to carefully crafted emails or let the paperwork do the talking.  But always be responsive because she might get offended if you are not.  And you do not want to offend her because that will absolutely affect the transaction.

Finally, regardless of how you communicate with her, always be nice.  It is disarming, and most often works in your favor.  And if not?  It costs you nothing.

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