Editor’s note: The following Q-and-A interview with Paula Swayne, a broker and co-owner in California is a part of the "To Be a Broker" editorial project that highlights broker challenges and strategies for success. Click here for more info.
Name: Paula Swayne
Years as a broker: 14
Number of sales agents who you supervise: 45
Years working in the real estate industry: 14
Q: What is the biggest change you have made to the brokerage in the past year, and what prompted this change? How has this change impacted the bottom line, if at all? What has changed about your service offering in the past year?
A: Our biggest change has been our approach to residential real estate sales. We have always been primarily a listing office and this has been a successful approach for us. However, with the turn in the market we have had to concentrate on the buying side of real estate as well. Thankfully, we have had newer agents who have heartily enjoyed working with buyers.
Our service has morphed to include more of what a buyer’s expectations are: quicker responses to communications; concentration on the changing expectations of our buyers; and realizing that the Internet has created savvy buyers.
Q: Are brokers more or less relevant to sales associates in the current housing market than they were five years ago? Why or why not?
A: Brokers are more relevant than ever, but in a different way. While licensees do not need brokers for the bricks and mortar, the broker is needed more than ever to ensure that the licensee is current with the latest changes in real estate law.
Q: Are brokers more or less relevant to consumers these days than they were five years ago? Why or why not?
A: Consumers are more savvy than ever before. As such, they do not need brokers to share their knowledge of each property. However, any consumer trying to navigate the current real estate market and its nuances will realize early on the value of an advocate looking out for their best interests. For this reason, brokers are a very necessary part of the real estate experience.
Q: What changes, if any, have you observed in the structure of real estate commissions/compensation/fees in the past year, and what has caused those changes?
A: We have not experienced a significant change in commissions. Each agent sets what (the agent feels) is a fair commission and negotiates that commission with the client.
Q: What are the most vital services, in your opinion, that you provide?
A: We provide our clients an advocate for their cause. We navigate the truly rough waters of today’s real estate market, (working to) make the ride as smooth as possible for our clients and ensure that, ultimately, they are confident homeowners.
Q: What would your agents say are the most vital services that you provide to them? What would consumers say are the most vital services that you provide to them?
A: We believe that our agents are hungry for their broker to be their advocate. We need to give them the knowledge they need to provide their clients with the very best representation available in today’s market. This is no difference for our clients. Knowledge and an understanding of the process makes this experience a "team event" that ultimately provides a "win" for all sides.
Q: What is the latest trend with home sales in your market area? Short-sale listings and sales? REO listings and sales? Purchases by first-time buyers? What is the latest trend with home prices? Offers? …CONTINUED
A: We have been fortunate in that we have always believed in a niche market and have not swayed far from that belief. As such, our market is localized. We have concentrated on specific, stable neighborhoods that have experienced less sway in values than outlying areas.
While we certainly have had a few short sales and foreclosures, it has not been to the degree of outlying areas and, as such, the values of our neighborhoods have averaged a drop closer to 20 percent than the 50 to 75 percent of the other neighborhoods. While sellers have had a harder time accepting the lower values and have had to make changes in their original asking price, once they have hit the market value the offers have come in.
Q: What are buyers’ primary concerns these days? Has this changed in recent months?
A: The buyers’ concern has continued to be a "deal." If they are represented by a knowledgeable Realtor, they have discovered fairly quickly that, contrary to common belief, this is not a buyer’s market. There is continued competition for good listings priced correctly. Buyers are willing to "step up to the plate" only after they have lost out on several properties due to offering less than competitive prices.
Q: What are sellers’ primary concerns these days? Has this changed in recent months?
A: Homeowners are still questioning timing. Should they wait to net more from their property in a few years? Sellers are only now coming to an understanding that this market is going to be in recovery mode for years and building equity is a commitment of five to 10 years, not months.
Q: Are the demographics of buyers or sellers changing? Explain.
A: Right now, first-time homebuyers and investors are the bulk of our homebuyers and this is not going to change until the lenders are willing to consider middle America as legitimate homebuyers. Move-up buyers are almost nonexistent as lenders (may) not consider (some of these) buyers as good risks. Until this attitude changes, upper-level homes that require jumbo loans are going to struggle.
Q: What types of properties are selling fastest in your market area and why?
A: Obviously, any property that qualifies for the tax credit is the predominant kind of sale we are experiencing.
Q: What types of properties are selling slowest and why?
A: The slowest market section is the upper-level homes, as lenders are simply not looking kindly on (loans for this type of property).
Q: What is the largest investment you have made in technology in the past year, and has it paid off?
A: One of the benefits of today’s technology is the minimal cost. A broker no longer has to spend tens of thousands of dollars to have an Internet presence. Our clients are no longer macro-searching for information. They are micro-searching with such keywords as "123 Main Street, Anywhere, U.S.A." It places brokerages on a level playing field.
The brokers’ investment should now be about time and effort to organically create a presence on the Internet by having the staff to provide said time.
Q: In which areas have you reduced costs in the past year, and what has been the business impact of those cuts? …CONTINUED
A: We have been fortunate in that we have been able to retain our staff, for the most part. We have looked at costs that in previous years were insignificant and have now analyzed what is really a return on our investment.
Small costs such as "MongoFax" can be replaced by encouraging our agents to scan (documents); virtual tours previously supplied as a separate entity can now be supplied by a company that offers a multitude of media facets at a discounted price. By spending wisely, we have offered the same opportunities and have spent less.
Q: What is your forecast for the real estate market in 2010?
A: 2007 and 2008 were the difficult years. Since then, our business has continued to improve and our cast of licensees has grown. We believe that 2010 will continue to improve.
Q: What is the single biggest challenge that you face as a broker? What is the biggest worry these days about the state of the housing market and economy? About your brokerage?
A: Our biggest challenge has been dealing with the nuances of a challenging market. We call them "15-minute interruptions" and they make up our day. Realtors are coming up against new and difficult situations daily. Our job is to help them solve these challenges with as little stress for both them and their clients.
Knowledge and experience is critical to having a win-win result for all parties. The biggest worry is the continued hold that the banks have on our industry. Due to the Home Valuation Code of Conduct, banks can own the appraisal management companies that hire appraisers.
(Some appraisers may work to appease) the banks in order to have continued employment. This can result in stagnation of equity for homeowners as appraisers may attempt to appease their employers by undervaluing properties to reduce risk to the lender. This is not a worry for our brokerage specifically, but for the real estate industry as a whole.
Q: Briefly describe a typical day for you, and what duties occupy the most and least time.
A: As mentioned before, a typical day is the "15-minute interruption." It is continually dealing with the new issues of the day. These can be as mundane as a seller who is having difficulty with an FHA loan to a bank demanding identification information from a buyer when the bank is the seller’s lender and has no fiduciary duty to the buyer.
Realtors are scrambling to keep up with the daily changes in our laws and guidelines, and brokers are duty-bound to be ahead of the changes, interpret them and implement them.
Q: What is most misunderstood, by agents and/or by consumers, about the work that you perform?
A: Probably the most misunderstood aspect of broker-owners is the perception that we are not struggling alongside our agents. Owners are the first line (of) defense in a struggling market and often make personal sacrifices to ensure that the company remains strong for its agents.
Q: Feel free to comment on any other aspect of your work as a broker that you think would be relevant and helpful for other brokers.
A: More than ever, it is important to retain the level of professionalism, integrity and knowledge that has been the norm for Realtors in less challenging times. Those who adhere to these ideals will survive this market and go on to thrive in coming years.
Paula Swayne is broker of record and co-owner of Windermere Dunnigan Realtors, based in Sacramento, Calif.
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