Technology Transactionsby Peter G. Miller
Peter G. Miller
OurBroker®
There were 6,000 real estate pros at the mid-year convention of the
National Association of Realtors® in Washington, and the one question that
arose repeatedly was this: The Internet is terrific, but how do I make money
with this new technology?
In the hallways and seminar rooms, at meals and at impromptu conversations you
could see that brokers have come to three basic conclusions:
*Yes, I can post listings on the Web and that"s a good thing.
*Yes, I can "meet" potential buyers for listings and I like that.
*Yes, I can locate prospective buyer broker clients.
The catch, of course, is that brokers were doing all these things before the
Internet and they"re still doing them off the Internet today.
So the question is not about getting business. It"s about making money.
Savvy brokers have no trouble getting listings. But listings are not a sure
source of profits because you only get a fee if the property sells. No broker
sells every listing, and if you get enough properties that don"t sell or which
represent big marketing costs you can list yourself into bankruptcy.
Buyer brokers have similar concerns. A client is a "cost" until a deal is made.
Every hour spent with a client who doesn"t close means less income for the
broker.
All of which gets us back to the Internet.
If the Internet can produce additional business for brokers that"s a step in
the right direction. But is such business profitable? Is the time spent
servicing clients found online reducing the income that brokers might otherwise
gain? And is the Web turning into another cost for brokers, a cost on top of
all the other expenses required to remain in business?
The Internet is neither a curiosity nor a hobby at this point. It is
increasingly a place of business, and like all commercial matters that means
the usual financial standards apply.
Unfortunately, today"s business guidelines can be tough. In one example, a food
service business closed the last branch of a local eatery, not because it was
unprofitable, but because fast food outlets run by the firm produced better
returns.
In a similar sense, brokers will stay online if the results are financially
advantageous, just as they would with any productive medium. And by
"financially advantageous," what brokers increasingly mean is not just more
business, but transactions that result in profits equal or greater than those
which can be obtained offline.
In effect, it"s not enough for a site to generate business if such business
increases broker costs and cuts broker margins. It"s not enough for a site to
generate business if such business does not maximize profits. It"s not enough
for sites to offer short-term gains if the long-term result is reduced broker
income.
The days of Internet hype are over -- a shame because it was a lot of fun. The
new measure of success is now the bottom line, a criteria everyone can
understand.
Question Of The
Week
Q Can a "duplex" be a "townhouse" and
vice versa?
A In general terms a "duplex" is a
single property which includes two separate living units. The units can be
arranged such that one is on top of the other, or they can be side to side and
perhaps even front to back.
A townhouse can be seen as one unit within a row of individual properties that
share a common design pattern. The old term, "row house" fits nicely.
A further complication is that a duplex sits on one piece of ground, whereas
townhouses may have a separate lot for each unit or as condos or co-up units
they can all share a single piece of property.
So, if you had a duplex with units side by side, they could sure look like
townhouses -- maybe just a short row. And a duplex with units side by side may
seem to consist of two townhouse end units.
The catch is that local zoning codes may permit "townhouses" but not "duplex"
units. If the definition game is an issue in terms of zoning, marketing or
whatever, you need to speak with nearby brokers and attorneys to see how the
matter is handled locally.
Weekly Resource
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explaining how to complain about your nearby friendly bank....