Brokerages are dropping like flies in Tampa Bay.  The single biggest reason for this across the board failure in this tough market is this: AGENT SPLITS.  Brokers are easily intimidated by Agents threatening to leave an office for another one if the Broker does not match the “split” of another Broker.  When I was a new Agent in 1991, my Broker had me on a 25% / 75% split.  That was 25% for me, 25% for the Agent who was mentoring me and 50% for the company for putting me on her back and carrying me!  My Broker at that time, the late Juanita Dennis was the best Broker I ever worked for in my almost 20 years in this business.  In exchange for split, I got to hang around the office with TOP performers of that day, Irene Stoke, Jack Fortner, Carmen Rodriguez and others who put me under their wing.  I got paid for getting an education on how this business works.  When I was ready, I was graduated to a 50/50 as production increased and so forth.

TODAY, greedy agents with no regard for their company jump from ship to ship seeking the best split.  My favorite quote is one my friend Juanita Dennis once told me.  She said, and I’ll never forget it: “Vince, 90% of $0.00 is $0.00 and 50% of $500,000 is $250,000.  I want to grow WITH you.”  She had such a way of making agents UNDERSTAND the system.  Thank GOD she was my first broker! Nobody in her firm made more than 75% split. She was PROFITABLE! She understood the business.

Agents that deserve that 90% to 95% split are BIG producers AND Team players.  If an agent makes $500,000 per year, then the Broker makes $50,000 (or MORE).  A low producing agent on a 50/50 that makes $30,000 thinks they deserve to be on a big producer split (so the Broker can make $100 per month off that agent? HELLO! Some agents use more toilet paper than that in one year!  I know one of my Agents does)? This is so common in my industry.   It’s the low producer on a big split that kills the broker!  

ALL agents must help the Broker by recruiting agents for the Broker to keep the company strong.  WIN/WIN as another great Broker, Mario Polo once told me “no reason it can’t be a WIN/WIN” and that is also true.

The bottom lime is that Agents, in order to survive, must get off the greed bandwagon or they will be out of business along with the company they work for.  Brokers must learn to SHOW agents why they are better on the lower split.  The KEY is, the Broker must offer SOMETHING to the agent.  NOT JUST A ROOF OVER THEIR HEAD. 

We are in difficult times and in order to make it out of the “broken bubble” we all work in, agents need to help their brokers.  Brokers need to help their agents.  That is a WIN/WIN everyone can survive.

Sometimes, even the best Brokers don’t make it.  SMART BROKERS are trimming the fat, getting rid of General Manager’s making a large salary when other managers are more qualified (as in having an actual Broker’s licence or being able to at least pass the exam) are able to take over the company for less money.  (”Oh no he did not”……. OH YES I DID! I WENT THERE)

BROKERS: The fat must be trimmed in management and staff. Agents not selling need to be shown the door. They use paper, computers, print hundreds of pages, waste managers time for ZERO return.  SHAKE THINGS UP, fire some unnecessary staff, bring in some new agents on better splits, CHANGE the splits of agents who don’t perform. CUT SALARY of management when the company does not produce. Hold everyone accountable!

Real estate will have a roaring comeback in a few more years.  Can you get learn to be profitable now so in three years you are ready to reap the rewards? Lesson learned!?! For more information, go to http://www.headofrealestate.com

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Who do certain athletes and various celebrities think that because they are entertainers, that they can tell us what to think? Bruce Springsteen, Sean Penn and the like can keep it to themself as far as I’m concerned. Republican or Democrat, it does not matter. I don’t need Oprah Winfrey to tell me who to vote for. Sean Penn getting his Oscar the other night made me ill. He was there to complain AFTER, A F T E R  the people of California voted a certain way, he was there to stand on his soapbox (the man who was DUMB enough to marry Madonna, the biggest gold digger since Melinda _ _ _ _ _ _ , can’t say the last name because I don’t want to get a letter from the Law Office of Ackerman Sinerfitt) and tell everyone that they were wrong. Do they, can they relate to the rest of us in the real world? They should be thankful that they don’t have to hold down a 9-5 job instead of making millions of dollars to do something they love! We NEED them to entertain us now, more than ever. But we also need them to keep their opinions to themself. The country needs unity now, not division and controversy.

They need to act, sing or play ball. Don’t tell me your political agenda. I like WWE Chairman Vince McMahon. He simply spends his money telling people to vote, not who to vote for! For more information, go to: http://www.headofrealestate.com

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What if:   Lenders stopped charging interest on loans for those “upside down” with no equity in their homes? Those property owners continue to pay the same amount (and it continues to be tax deductible) for a period on two to three years. Most of the payment on those bad loans are still 99% interest. Now it would all go to reduce principal! Most loans would be “right side up” in 12-36 months! For each zero interest payment made, another payment can be added to the loan. This is totally offset the amount owed and in most cases, the loan is new (post 2004) so most of the CURRENT PAYMENT is interest).

The lender keep the revenue flowing, property taxes continue to be paid as the same part of escrow will go to escrow. This will slow down considerably the free fall of foreclosures and equal up the supply and demand factor. This will increase absorption rates so an overall acceleration of the recovery would follow.

There are lots of little “tweaks” that must be made, but I will leave this up to those in Washington much smarter than me. I think this will help if the right people got involved. For more information on real estate in Tampa Bay, go to http://www.headofrealestate.com

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You hire an agent to sell your home.  They sing, they dance they promise you the world.  You sign the documents and list your house.  Days, weeks and months pass and no word from your agent. NOT A WORD!  Is your home even for sale?  You call the agent and the phone is no longer in service.  You call the broker of that agent and find out that he is now working at a 7-11 and he is a part time agent.  Nothing was done that was promised!  You want O U T of the listing at once!  You NEED to sell your home!  When you express your disappointment to the broker, he informs you that you must pay $1,000 to terminate the listing! “WHAT?”

Before you list your home with ANY agent, make certain you have in WRITING that you can cancel your listing if you are not happy with your agent (at no cost). To see an example, go to my website at http://www.headofrealestate.com  and on the right side of the column, go to the “EASY EXIT LISTING” agreement.  Don’t list your home without it!

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As I sit in my office thinking of how the real estate world operates, and I’m talking to Realtor’s and Real Estate Franchises, I see the world changing before my eyes.  Since I am one of the highest ranking ERA Agents in the world, I feel like I can honestly evaluate all franchise models and tell you why I don’t think they can or will survive this downturn.

ERA for example, charges me a 6% franchise fee on every dollar (gross) that I bring in. Newer franchise owners are charged 8% of every dollar.  When my contract with ERA expires, they will try and stick me with the 8% number for certain when they ask my company to renew the agreement with ERA. RE/MAX, Century 21, Prudential and Coldwell Banker are similar models. 

If you are a new or low producing agent, what you get for that 6%-8% is tons of support and or training and a generic “box” of marketing tools to boost your self esteem and make you look like you have experience to the uneducated consumer.  If you make $50,000 per year, that $3,000 to $4,000 per year in franchise fees is well worth it.  After all, you are giving 50% to your broker anyway.

Once agents start to get it (the few who do) and start to sell more real estate, that 8% number starts to choke us. When you factor in what you get for your money, those figures are so unwarranted that you start to wonder why you pay them?  In 2008, my Team, The Arcuri Team paid over $57,000 in franchise fees to ERA.  Did I get a free ticket to the ERA Convention?  NO! I’m in the top three Teams in the world in 2008 for ERA. Has anyone called me?  NO! I have been one of the top agents in the world with ERA since 1995. Have I ever shaken hands with the CEO of ERA?  NO.  Those privileges are reserved for “the good ol boy network”, the same agents every year. One agent who is on the lecture circuit with ERA is the wife of a big military man. They live outside the Base in their town.  Her husband sees to it that she gets all the leads from that Base.  WHAT CAN SHE TEACH ME OR ANY AGENT?  She is jet set across the country by ERA to tell everyone how her magnets are prettier than everyone else’s and that is why she is so good!  She does not know why she has success! 2 + 2 = 4.  It really is insulting to the TRUE top players on that organization.

Agents are getting tired of the “same old same old” and we are expecting marketing in exchange for our dollars.  I pay for 100% of my marketing!  What was ERA’s part in my 2008 sucess?  I really don’t know.  I saw ZERO ERA ads in Tampa, no T.V. ads in Tampa. What I DO know is that with that $57,000, I certainly could have used that money in the TAMPA market! How do I benifit from handing ERA $57,000 per year and nobody knows your name?

New franchise models like EXIT Realty are the future. They are not taking advantage of their agents and they allow the agent to keep more money and make more money with their referral program. Agents there can make more than 100% of their commissions. MORE THAN 100%!  Franchises like EXIT Realty, Charles Ruttenberg and Future Home Realty in Tampa Bay charge a small fee off each closing.  Models like this are popping up nationwide and those models ARE the future of real estate.  GREED will kill the traditional model and in five short years, the Broker landscape in this country will look very different than it does today.  The greedy dinosaurs of today will fall to the wayside just like the real dinosaurs of yesteryear.

For more information, visit my website at http://www.headofrealestate.com

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Bush, Obama, Mc Cain. They all missed the main problem with our US economy. Bailouts of Wallstreet and the irresponsible banks who caused this mess is not the remedy to turning around this woeful marketplace. It ALL starts and ends with real estate. The JOBS, did you hear that President Obama, the JOBS are all in real estate. When people are buying real estate, lenders are working, loan officers, secretaries, assistants, processors. The title companies are processing the loans, closers, attorneys, the girl who answers the phone! Realtors, surveyors, appraisers, home inspectors, repairmen and contractors building and repairing houses! Home Depot is selling the goods to fix and update all of the houses that are selling!

Fixing roads that don’t need repair and “cashing in favors” with all of the PORK in those bailouts is not the road to recovery. The focus needs to be on real estate. When real estate starts rolling again, the JOBS will come with it as well as the consumer SPENDING that will heal and grow our economy. President Obama is now our leader and like the great leader I know he will be, because he HAS to be, America has to make this work! The Democrats and the Republicans ALL need to show some love to REAL ESTATE!

Until real estate returns, our economy will be dormant! Wake up and smell the coffee Washington!

For more information, visit my website at http://www.headofrealestate.com

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O.K., so we now have the bailout! This seems odd, that millions of Americans who are in trouble are passed over and $700 Billion goes right to the people who caused this mess to begin with. Now Wallstreet will breathe a sigh of relief, hold on to the money for a while before they are pressured to lend again in 2009.

HERE IS THE PROBLEM AMERICA IS OVERLOOKING: The banks are still not aiding those in need. They are “Short Selling” homes to investors, but not the home owners. Many homeowners are filing bankruptcy to force lenders to renegotiate loans that the lender should be doing by their own free will. Now here is the clincher and the trigger that will drain our economy for the next 5-7 years if something is not done:

As you may know, President Bush passed legislation in 2008 to waive any IRS taxes on the shortfall for those who sell via short Sale or are foreclosure victims. Everyone seems to think that EVERYONE is included and they could not be further from the truth. That law ONLY applies to those who did not pull equity or refinance their home. In other words, if you paid $300,000 for your home in 2003 and in 2005 you pulled $100,000 out to pay off bills, etc. (you owe $410,000) and the home is now worth $290,000 and you sell for that number (Short Sale), you will NOT be exempt from the $110,000 shortage and you WILL receive a 1099 for this amount.

This law needs to be revised and updated for the NOW situation facing this country. No, it’s not fair to the ones who are paying on time, but this law must change and all of those IRS penalties must be waived across the board……… and I’ll take a beating for saying this, but it should apply to ALL properties including investors. Wallstreet was bailed out, now (as Obama and McCain put it) Mainstreet will need a bailout as well. Otherwise, one in six Americans will face another financial disaster and the economy will be impacted again in another way because those people will not be able to SPEND and BUY things. And that is the medicine for the economy to recover.

This will be another disaster if the legislation is not changed again. America needs the bailout worse than Wallstreet ever did.

For more information, go to http://www.headofrealestate.com

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The new Elmo Live toy hit the market today.  Go to any toy store and they are everywhere!  Just like real estate, it’s about supply and demand.  Wait till Christmas!  Wait till your kid asks you for one.  There will be ZERO inventory in the stores and you will go right to e-bay and pay more than retail for the toy.

It reminds me of 2005 real estate market.  Little inventory, many buyers.  Just like real estate, if the toy maker started pumping out toys (like the builders did houses and condos), I’ll bet speculators will rush to the store and buy every toy they can get their greedy hands on!  The thought: They will double their money with the “Elmo Bubble”.

Then, after the market is flooded with toys, those investors will be left with a doll that is worth about 50% of what they paid!  Those credit card companies that financed the deals will be in big trouble as well.

Don’t worry, if this senario becomes a reality, the government will bail out those credit card companies and take those losses for them.  Our tax dollars will pay for it.  So run out and buy as many Elmo dolls as your credit limit will allow (NOT).

For more information, go to: http://www.headofrealestate.com

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Right now, in Tampa, you can buy a 3500 square foot home (heated and cooled) with a caged pool, three car garage, 5 bedrooms, four baths, an oversized media room in a gated and guarded community for about $300,000 to $375,000 depending on the area.

How long do you think it is going to last? NOT LONG. As real estate suffered this 2008, everyone was sitting on their hands. Now, with the bailout, investors are eating up inventory. What are other waiting for? Where should investors buy?

Look at who was hot when the market was on fire:

Las Vegas

Tampa

Phoenix

Naturally, those areas fell the farthest when the market collapsed! Who is set on that big “V” curve or rebound? Those same areas (stay away from condo’s). Tomorrow’s millionaires are buying property today in Florida, Nevada and Arizona.

Jump on the bandwagon now before it gets filled up again. For more information, go to http://www.headofrealestate.com

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