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In This Issue   Special "Events" Edition
  The Lion Tamer - Andrew Zsolt, Toronto, ON

San Francisco Links and Recommendations

Coldwell Banker Centennial Society, Coldwell Banker Peter Benninger Realty, Kitchener, ON

New on the Blog

Beating the Discounters - The Anthology Continued, by Sheldon Johnston, Edmonton, AB


     

Unless you're living in a bubble - and I don't mean a real estate bubble - you've heard about Coldwell Banker's 100th Anniversary celebrations in San Francisco at the International Business conference, which happens to take place next week. Head office tells me there are over 350 Canadians registered to attend, making it the biggest national networking opportunity our network has seen in over 10 years. I for one, am very excited to see friends from across the country I only see once a year, to learn from some of the most respected experts in the industry, to have a great time, and to write it all off as a business expense.

If you're not going, it's not too late to register, but it may be too late to find accomodations. There could be 15,000 Coldwell Banker agents from around the world in attendance, making hotel reservations in a very popular tourist destination even harder to come across. Try www.hotwire.com if you still need a hotel.

Don't forget about the other events coming up in Toronto and Red Deer - whether or not you're going to IBC, the annual awards events are worth the trip as well. Sheldon and I will be at all three events, so the next issue of Network News will feature pictures and stories from the events. We look forward to seeing everyone and hearing your stories to share in our humble newsletter. Watch the blog for updates posted from the events.

Thanks for reading, Sara.
Edmonton, AB

 

The Lion Tamer

 
Andrew Zsolt
 

Who dreams of being a lion tamer? Andrew Zsolt does. As strange as it sounds I think being a lion tamer and a broker have something in common. While the first thing that comes to mind might be "3-ring circus," being up for a challenge, and performing under pressure are requirements for both jobs. Just try starting a brokerage never having sold a house. Fast forward a few years (being kind here of course) and you are one of the most respected brokers in North America and still haven't sold a home. Now that’s taking on a challenge!

We decided to feature Andrew Zsolt in this issue of Network News because he attends every event possible, in fact, he has attended the last 14 IBC's, and has 40 of his agents going to San Francisco next week. When we interviewed Andrew though, we found there is a much more interesting story to report.

Originally a CA (that's when he decided a la Monte Python, that he wanted to be a lion tamer), he completed his MBA at Western and then began selling commercial real estate, developing 3 million square feet of space between 1984 and 1990. During this time he acquired an 35 person, Homelife office which he sold to his manager, deciding to start over again from scratch with a brand offering more to its network. In 1990 he opened the first Coldwell Banker passport office in North America (meaning he started the office with no agents)and has since grown that to 300 agents and counting – one of the largest in our network. He has been around for every single Coldwell Banker Canada president - an honour only a few of us share. His downtown Toronto office is #1 in the network for it's size, 4 years running.

How does someone build a company with 300 agents and 5 offices in one of the most competitive markets in the world from scratch? The simple answer is: acute business acumen and an understanding of what agents need, to be successful. His unwavering commitment to ongoing training and cutting edge technology is a major attraction to his agents. His goal is to give his agents the edge over the competition by staying current on industry trends and technology. For example, he recognizes the power of online marketing, and recently had us put on a workshop at his North York office on search engine marketing; he is having us back in March where we'll introduce the power of blogging to the online marketing presentation.

Sara had the pleasure of spending a few days in New York city with Andrew last January at the Inman News conference (an educational conference with an emphasis on industry trends and technology). Andrew was the only other Canadian attending the conference from Coldwell Banker aside from a few head office staff. Sara recalls: "He arrived in New York a day or two before us and you wouldn't know it was his first time in New York city. When we met up with him he already had all of Manhattan figured out and photographed, had been to 2 or 3 Broadway shows, and became our official tour guide. He'd also found the steakhouse with the largest portions I've ever seen." Andrew is a hobby photographer and has been known to take as many as 600 non-digital photos at a conference.

Andrew emphasizes the importance of events saying that they open up your mind to new possibilities and methodologies, provide an opportunity to build a referral network, and are the best place to learn all about Coldwell Banker Tools and Systems.

If you're going to any of the Coldwell Banker events planned over the next few weeks, and want some advice from a true industry expert, then look up - at 6'3" he’s one of the tallest brokers you’ll see. As for taming lions, I think he’s tamed more than most. That, I can definitely picture.

     


Broker
Coldwell Banker
Terrequity Realty,
Toronto, ON
azsolt@terrequity.com


Andrew is pictured above collecting an award from Jim Gillespie at IBC last year.


Andrew & Sara, Times Square

 

New On The Blog
  San Francisco Links and Recommendations
 


The Perfect Media Interview

Search Engine Ranking Tool

Real Estate Agents Could Lose Their Blackberries?

Rookie Realtors - Will They Succeed?

Changing Perceptions on the Housing Bubble

New Online Real Estate Bookstore

More Reliance On Agents, More Internet Use - NAR

Real Estate Agents - The Way of the Dodo?

Zillow.com - Aiming to put Brokers out of of the Biz?

Fingerprints - Is That the Next Big Thing?

     

I'm not going to call myself a San Francisco expert, but this March will be my 5th visit to the city so I am qualified to give some advice. For those of you going to IBC, read on...

Our recommendations:

  • Dress warmly - Mark Twain wrote that the coldest winter he ever spent was a summer in San Francisco. The hotels are a good hike from the conference center, but not far enough to make it worth cabbing, so expect to spend some time outside. Plus, the "Canada Day" festivities are down by the water which naturally is chillier. This link shows the average temperatures for February.
  • There are over 350 Canadians attending IBC this year (last year there were just over 30), which makes this is the best chance we've had to network with each other in years. With 15,000 in attendance it can be tough to find eachother, so show your Canadian spirit and wear red and white. With the Olympics on while we're there it makes it really easy - stop by Zellers or The Bay before you head down and pick up some Canadian Olympic gear.
  • Transportation - the cab drivers in San Fran are crazy, they only accept cash (generally) and are extremely difficult to come by down by the waterfront. Coldwell Banker has a bus to get us back to the hotels, but that only works if you're planning on calling it a night at 10pm.
  • Bring cash - I already mentioned cabbies only take cash, well, a lot of bars won't run tabs (including the restaurant we're visiting on "Canada Day") and only take cash, so if you're going out at night you can leave your credit card at home.

Links:

  • Blue & Gold Fleet - Tours of San Francisco Bay and the only way to get to Alcatraz (This is also the company that will be touring us around the harbour for our "Canada Day"). Book ahead if you want to go to Alcatraz as most trips are sold out in advance. We're going on the morning of the 15th with a few other Canadians, you are all welcome to join us.
  • Open Table - Website that lists San Francisco restaurants with menus and reviews, make reservations online.
  • Moscone Center - This is the conference center where IBC is taking place.
  • Napa Valley Wine Train - Haven't been on this, but it looks like fun.
  • IBC website - OK, I'm sure you've been to this site already, but here it is again just in case.
 

Coldwell Banker Centennial Society  
Coldwell Banker Peter Benninger Realty
 

Congratulations to Coldwell Banker Peter Benninger Realty for being named to the Centennial Society! This group of 75 companies is participating in the 100 homes in 100 years campaign, and Peter Benninger's company is the only Canadian company to be included, in fact, they're the only company outside of the US!!! The 75 companies will raise 5 million dollars by the end of the year to sponsor local Habitat for Humanity homes.

In a recent interview Jim Gillespie, President of Coldwell Banker Real Estate Corporation, said of the Centennial Society: "To raise this much money and help 114 families so far gain a home is astounding... They have made such a major commitment and spent hours and hours on fundraising projects, as well as the actual home build. This Centennial group is special to me and I'm certain the entire Coldwell Banker System as well."

Coldwell Banker Peter Benninger Realty raised $86,000 for Habitat for Humanity in 2005, which coincided with the company's 20th anniversary. They raised the money in just one night - the Building Dreams Gala was attended by 650 people. The house will be built in the spring, and their agents are planning on rolling up their sleeves and participating in the build itself. An additional $5000 was raised through donations from the agents at the company last year. Well done!

 

     


Kitchener, ON
tania@coldwellbankerpbr.com


 

Beat the Discounters, The Anthology Continues, by Sheldon Johnston
 

Comparing the costs of assisted sale/marketing company vs. professional sales.

I’m convinced, transaction costs are relative. If you sell on your own you have a moderate (20%) chance of selling. I don’t know what percentage of FSBOs sell below market value, but NAR stats show the average FSBO goes for 16% less than the average professional sale.

The truth is, every transaction has costs. Inexperienced negotiations can be extremely costly if the seller does not know how to negotiate, handle multiple offers, or even understand how they might get multiple offers. That’s just one example of where a seller can leave money on the table reducing their potential savings. Looking at a professional sale, I’ll use our company’s “policy” approved fee and we’ll compare the costs of sale.

Professional Sale
Sale price: $200,000
My company charges 7% on the first $100,000 and 3% on the balance, split 50/50 with the selling agent. I’m not going to cover what is included in this fee. If I were to go into details we would turn this summary in to a booklet (maybe that should be the third installment – what does a seller really get?).

Private/Assisted Sale
I’m going to pick on a local company that assists FSBOs for this example, but the reality is that the fee and services will vary depending on the company. You’ll have to tailor your comparison to the company you are competing with:

  • Up front cost : $595+GST
  • Up charge for extra marketing : $75-$300+GST. Now, on one hand these companies say a house will sell regardless of marketing, while on the other they offer enhanced marketing options. This is a perfect example that marketing is a critical factor in obtaining the most money for a home - why else would a company suggest the need for additional marketing?
  • Offer and negotiations : this is very hard to cost, but recent stats (Jan 2006) from the National Association of Realtors show that private sales sell on average 16% lower than homes sold with a professional, which in this example means as much as $32,000 less. For argument’s sake lets say the difference is as low as 3% which in this case works out to $6000. (Don’t forget the fact that dealing with unqualified buyers often leads to sellers having numerous offers collapse).
  • Selling agent’s fee : In many cases the buyer is represented by an agent and the seller is willing pay a commission to that agent. Let’s say the seller negotiates a buyer's agent down and the buyer's agent accepts 2.5% on $100,000 and 1% on the balance. That’s $4280 including GST.
  • Limited market exposure : Again according to NAR, 90% of buyers work with an agent, which drastically limits the seller’s market exposure. In many cases buyers are also looking at private sales to save money on the purchase price because they know the seller is going to save the commission, so they will expect a discount. Again for argument’s sake, lets say that only costs the seller $4000.
  • Seller’s time invested : The seller’s time has value As well…Time spent marketing, taking phone calls and arranging showings (average home needs 11-22 showings to sell). Showings take about 20-45 minutes. Valuing time only at minimum wage, the seller’s time would be worth $80 more or less, just for the showings. What seller do you know that would value their time below minimum wage? None if they’re out bragging with their friends. So let’s just take a look at what we have so far.

Cost comparison on a $200,000 home:

Private Sale Costs Professional Sale Costs

Marketing: $595+GST with no upcharge
Offer and Negotiations: $6000
Buyer’s Agent Commission: $4280
Buyers Discounting price: $4000
Seller’s Time: $80.

Net to seller: $189,045

Real Estate Fees: $10,700



Net to seller: $189,300

I have used very conservative numbers here. It’s likely the seller’s time is worth more, that they’ll sell for less than 3% lower than market value, and the buyers may discount the price more. Even in a hot market I’ve seen sellers take $20000 less than market value, because they weren’t able to take advantage of multiple offers.

A private sale not only costs a seller more money, and takes up much more time than selling with a professional, but has risks as well. Sellers are not covered for errors and omissions, and face the risk of showing unqualified buyers their home and everything in it. Over 80% of private sales fail end the seller ends up listing with a professional.

A small miscalculation by the sellers means they’ll net far less in the end than if they were represented professionally. And unlike the marketing material from some fsbo companies that’s no B.S.

 

Sponsored By:   Final Note - Poll Results
 

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Last month we ran a poll - what do you think will happen to the national real estate market in 2006? Well, it seems we have a pretty optimistic readership - 69% of voters thought '06 would be as good or better than '05! See the results here.

Have any idea for a story or a poll? Let us know. Being featured in Network News is a great PR opportunity, plus, you get a great article written about you to use in your promo materials.

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