Brian R Kelly

Category: Brian Kelly

  • Real Estate Brokerage Model Will Change To Accommodate Trust and Service

    Real Estate Brokerage Model Will Change To Accommodate Trust and Service
    Real Estate Brokerage Must Deliver Service and Trust
    Real estate brokerage model will change to accommodate trust and service. Serving home buyers and sellers with trustworthy service will be a generous business for years to come. How Realtors and brokerage firms get paid will most likely change. Change is being driven by the human need for honest communication and is being facilitated by technology. Here are four observations to make the point.

    One: Ebay and AirBnB. Models that are built on trust. They work because of stamps or stars of trust conveyed by stories of other people.

    Two: Google took inventory of all real property and Zillow Make Me Move is a system that is begging for trust. Ebay and AirBnB proved their models. I hear grown Realtors calling Zillow and Trulia the porn sites of real estate. What? Give me a break – what that tells me is that they are gaining traction and weak agents are becoming fearful. Do not even come back with poor data integrity, etc. (Granted…buyers miss some deals because Zillow updates run slower than MLS) The services still provide value.

    Three: Real estate brokerages can charge much less money if everything they did was compensated. 40-50% of all listings, energy , advertising is wasted on properties where the seller does not have sufficient motivation or ability to sell for the market demand. Sellers would sell “if” they get their price (to buy the next place or simply pay off the lender) Home shoppers not buyers: real estate agents may spend lots of time and gas showing houses to someone that does not “have to” buy a home. There is room for creative agreements with sellers and buyers and their brokerage firms if motivation and non-payment risks are reduced.

    Four: Social Media will push Brokerages to adapt “systems” because buyers and sellers will “connect” more frequently. (Pushing on the door of reducing the costs of finding the “Willing” party) Which will demand a service of transaction liability coordinator. Some title companies may niche and grow what some will see as a growing FSBO (For Sale By Owners) market. On the brokerage side, I can see a DIY brick and mortar model where the seller and buyer pay for a menu of services complementing Zillow. (Similar to local Ebay stores that handle the sale of an item for you for a fee). Agency law, fiduciary responsibility, and liability insurance will need to cover the scope of services rendered.

    [** Learning moment for agent compensation: The local Chattanooga MLS reports that there has been 5,144 homes sold year to date with total volume of $872,600,261. Multiply that number by 5% or 6% and you get roughly $34-$53 Million dollars of commissions. Divide that by 1,500 real estate agents and they average $35,000 each. Multiply $35,000 by 70% split that is nearly $25,000 a piece gross before gas, taxes, advertising , healthcare, etc. Agents are paid 1099 not W-2. You can see the model is pretty efficient, especially when a high percentage of activity is NEVER compensated. Imagine your boss walking in on payroll day and saying let’s roll the dice to see if you are worthy of being paid today!]

    The bottom line is that technology is changing how we serve people in real estate. I used my smart phone to check the level of a door jam, shine a light into a crawl space, check a HUD for closing, and text a message to another customer (All during one home showing). My buyers are calling me with information from Zillow, and Trulia on their phones. They are demanding a response. Please understand, that I am NOT predicting that smart phones will replace real estate agents. Nor, I am predicting a sharp reduction in the “cost” of sale of your home. Ebay does not seem to be making large dents in retail malls, and AirBnb has not toppled Marriott.

    Home buyers and sellers will pay for great service and trust. People will demand it. They may actually pay more than a “typical” commission to sort out all the “noise”. Tech is changing real estate; therefore, the real estate brokerage model will change to accommodate trust and service.

  • Five Easy Steps For New Real Estate Agent Success

    Five Easy Steps For New Real Estate Agent Success
    New Realtor On Job
    Five easy steps for new real estate agent success.

    1. Surrender the process to God, pray, choose a leader and a tribe that shares your values and demonstrates care and success in building warriors. Follow people with a credible track record. One of my teacher/mentors was a good For Sale By Owner or FSBO prospector. He shared stories and would dialog with us to help overcome known objections. Experience is a great teacher. If you can learn from someone else’s failures, you do not have to repeat them.

    2. Make a simple written plan with a mentor. The plan will include dates, specific measurable goals, and your signature. Do not under estimate the power of this exercise. Plan time with God and family first, Then schedule your business. I allowed business to trump my family time (Huge Mistake!) If you have ever kept a journal or diary you know the written word will re-wire your brain.

    3. Prospect, diligently, daily, no exceptions, building trust. The Only thing you have in this business is your reputation and how you handle relationships. Trust is made up of 4 components: Your ability, Your believability, Your connectivity, Your dependability. You will gain ability over time and more quickly than you realize. (ask for help, tell the truth, Don’t “Fake It till You Make It”) Believability is presenting who you advertise. If your high school picture is on your website, your credibility instantly diminishes when the customer meets a different looking person. Your connectivity is crucial. Follow up is the devil for most agents. You start serving the out of state couple on a three day tour and it is difficult to remember the email you told your friend you would send a week ago. Frequently “touching” the circle of people that care about you is powerful.

    4. Promise little, listen, deliver more – Just listen. Listen with your eyes and observe body language and not just the words. Listen to gain understanding of desires and wants. The emotional expression from spoken desires translates into fulfilling them if you can pick up on them.

    5. Weekly track with your mentor, coach or leader – Celebrate incremental successes of prospecting goals met, etc. Your loved ones want to see commission checks, but early in your career you need cheerleaders that celebrate the smaller victories that lead to big checks later. I am thankful to have written over 32 consecutive daily blog posts. Give, give, give, consistent daily good things will pay huge dividends later.

    Do what others are not willing to do on a daily basis. Be consistently planning, prospecting, serving, learning and celebrating. Five easy steps for new real estate agent success.

  • What Are Home Buyers In Chattanooga TN Looking For?

    What Are Home Buyers In Chattanooga TN Looking For?
    Chattanooga TN Home Buyers
    What are home buyers in Chattanooga TN looking for? Home shoppers I am serving have unique stories. There are similar themes across the board. The buyer clients are looking for the following:

    1. Saving time – less commute, more family time
    2. Preserve capital – Conservative purchase, not “house poor”
    3. Newer and updated – (One exception category)

    Saving Time – Several clients bought to cut the drive time. The primary motivation is not to cut the car gas bill. It was to have more time at home. Patterns of school and work shift with age. Time is the most precious commodity to many. Amenities and square footage are starting to diminish. Location to work, and community amenities is gaining momentum. One North Shore is a perfect example of this.

    Preserving Capital – Chattanooga real estate from 1990-2006 (for the most part) performed a steady 3%-4% value increase year to year. The last 7 years proved that is not always the case. Real estate buyers want a “good deal”. Even young buyers are being careful not to max out their loan capability. My experience is that Chattanooga home buyers are thinking about paying loans quicker and paying more cash down. Several buyers paid all cash for smaller homes to be debt free.

    Newer and Updated – Strong buyers want to purchase new or already updated decors. The one exception to this is younger purchasers. I served three first time home buyers that purchased distressed properties and spent significant sweat equity and remodel money. All three bought to live as owners. All three bought well under retail value and made wise purchases.

    My experience and market analysis shows that if you are a patient Chattanooga, TN home buyer, then you can do well, especially if you are looking at $325,000 and above.

    If you are a Chattanooga, TN house seller, in a property older than 6-8 years old, please consider paint, carpet and a few cosmetic upgrades. You will be much better positioned for today’s buyer.

    What are home buyers in Chattanooga TN looking for? My buyers are looking to save time, money and weekends free of home makeovers.

  • People Connection Drives Real Estate Technology Change

    People Connection Drives Real Estate Technology Change
    Palm Pilot Wind Chime
    People connection drives real estate technology change. The devices are faster, brighter, and upgrades rain down faster than a summer shower. All the rain is washing into creeks of social media, tablets, smartphones, and laptops. The river of technology is wide and moving pretty quickly. All of the waters of tech flow straight into the open mouths of people insatiable in their thirst to connect. The demand to tell their story, connect with their tribe, family, loved ones, and express themselves in visual art, music, words, and dance.

    The picture of the Palm Pilot reminded me of a cool tool that I used to own. A creative artist is using an old Palm Pilot as a wind chime. I took the picture for the benefit of a friend that actually has a working Palm Pilot. In her defense she uses it as a device to open Supra Lock Boxes for her real estate business. Real estate is all about people and properties. The Palm Pilot held an amazing amount of people and could sync your email contacts with your database. A portable private phone book. I loved my ability to carry thousands of people with me. (metaphorically of course)

    Fast forward to 2013. I showed a home this afternoon. Parents are walking around holding an iPhone and Face Time showing their daughter the view. Giving a limited experience to their loved one who was 2 states away. Connection..

    Last night we were eating dinner and someone remembered the cartoon dog character named Smedley. Some could not recall the character. My daughter had no frame of reference. Smartphone to the rescue. A few seconds later we were all watching a clip from Chilly Willy on Youtube. ( I would not necessarily recommend taking the time to watch it. Muttley has a better dog laugh)… We connected a memory and brought a story from the past into the present connecting generational stories.

    If you are on Facebook, how many “friends” have you connected with that you have not seen in years. Perhaps decades! Connection… We crave it, we need it. We simply need to encourage, reach out, tell stories, laugh, cry and inspire.

    Real estate needs connection. It demands it. We can share the experience of looking at a new home. We watch videos, listen to stories and read the words.

    Real property has a place. The axiom is Location, Location, Location. So true. People have connection. The real estate business is about connection, connection, connection.

    People connection drives real estate technology change.

  • Smart Phones Are Changing What Real Estate Agents Do

    Smart Phones Are Changing What Real Estate Agents Do
    Smart Phones Changing Real Estate Business
    Smart phones are changing what real estate agents do. What do real estate agents do? I hear and read about the comparisons of how technology will change real estate like it did with travel industry. I cannot see the future, but I do know that what I do as a Realtor in 2013 is different than what I did in 1995. Last decade, real estate agents, doctors and other “important” people had pagers. Remember those? Large belt buckled black with text and you could send messages to each other at lightning speed. Prior to pagers it was cell phones. Before cell phones it was car radio phones. I remember my parents installing a thermal paper printer with electronic message capability. We could print out the days “hot sheet” with the device.

    Does that mean that real estate is an early adopter of technology? Yes. Does it change what agents do? Yes… to a degree. Let me tell you a story.

    Early in my real estate career, my Dad taught me the phrase “See the people”. People are the real estate business. Real property and technology are merely along for the ride.

    The relationships we have with others and the trust we build is the real estate business… period. My observation about people in 2013 is that we “trust” our smart phone more than humans. After I finish this blog post I will go to my bedroom and place my iPhone on my bed stand. (Where is your phone now?) Sometimes I check to make sure that Dee is charging hers overnight. Why? Because I want to connect with my wife during the day tomorrow. I check the weather, the ball game score, use my flash light to see in crawl spaces, bubble level on crooked floors, … on and on it goes. Regardless of all the apps we use. I have a relationship with this tool and it is a constant companion. If I want to talk with my daughter most of the time I am connecting through her device. When she asks me about going on a walk or traveling, I ask her to take her phone. Life360 will at the minimum give me the device location.

    We have a relationship with our technology and it can tell stories with sound, and video that far surpasses the ability of fax and pager. The literal “gatekeeper” to a person is this device. Real estate agents will learn how to connect with customers through this personal technology, because the real estate brokerage business is All about relationships. The relationship with our smartphone forces us to change how we relate to others.

    Smart Phones Are Changing What Real Estate Agents Do.

  • Chattanooga TN Home Sales Require Full Seller Disclosure

    Chattanooga TN Home Sales Require Full Seller Disclosure
    Picture of First Page of TN Home Disclosure
    Chattanooga TN home sales require full seller disclosure. Full disclosure of defects and known problems is Tennessee law and applies to anyone selling residential property. This became law April 8, 1998. An outline provided by the state is located at this link. Most laws have exceptions. One of the most commonly used exceptions to this law is a absentee owner or builder. The spirit of the law is that you must have been living in the dwelling recently to be able to disclose “known” issues.

    This law helps keep sellers more honest in their dealings, but there are gray areas that cause pain. One of the gray areas pertains to repairs of problems. Technically, you do not need to list a defect if you repaired the issue. The problem becomes when the “repaired” problem not listed on the disclosure becomes a problem after the sale. Common issues in Chattanooga area are wet basements, and faulty septic systems. Owners may have the problems supposedly repaired in good faith. The new buyer finds out a year later that the issue has returned. Tempers may flare over perceived deception and cover up.

    The best way to avoid problems is to disclose the repairs and provide receipts of the work done to correct problems. That way the seller is not only fully disclosing the issue but also providing contact information about the contractor providing services. This advice was given to me from an attorney who represents clients regarding waste water problems.

    Ask your Realtor about exceptions to the disclosure. If you are exempt it is best to sign a document explaining how and why you are exempt from providing full disclosure. The spirit of the law is to protect consumers purchasing and selling a home.

    The form is several pages in length and covers many areas of your property. Every residential property in Tennessee is covered. Chattanooga TN Home Sales Require Full Seller Disclosure.

  • Recent Home Sales Prices Tell Small Part Of Success Story

    recent home sales prices tell small part success story
    Getting To Sold Is Often Journey

    Recent home sales prices tell small part of success story. The tale of a home sale can be one with adversity. The challenge is often finding the correct marketing price. Sometimes the story includes marketing, sometimes staging or perhaps condition. For the purpose of this article we will focus on pricing. List price or “asking price” is a large part of a good Realtor’s job. Like the experts on Antiques Roadshow a good real estate agent knows the latest “sold” prices, and has seen a good bit of competition. Unlike the Roadshow, your agent most likely has a relationship with you. This is good but it also can cloud judgement a bit.

    I was surprised when I looked at 12 sold listings that recently sold in an upscale neighborhood for Chattanooga, TN. What I found was that 50% of the sold homes had been listed with at least 2 different companies at consecutive time periods. My focus is most always on the final sales price and the days on market for that listing period. I had never considered the marketing period prior to the one that was successful. Many of the “first time” efforts lasted longer than the second time.

    This finding does play a part in the article I wrote about many homes not selling. So that means that some of the homes that scored in the did not sell category eventually do.

    What is interesting is what this means for traditional reported numbers. Realtor organizations like to promote all the good things about the housing market. One statistic mentioned is the List Price to Sales Price ratio. Generally this is calculated on the list price last quoted and the sales price as a percentage. So if a house is originally listed for $120,000 and reduced to $100,000 and sells for $97,000 then the List Price to Sales Price ratio is 97%.

    In my study what I found was that the last listing price to sales price ratio was 95%. The original list price to sales price ratio was 91%. But the surprising fact was that HALF of all the sold listings started out with a previous listing and a marketing price of 82% of the final sales price!

    That is a story you will not hear published in Realtor trade publications. Of course you do have to dig a bit because Realtors will leave the second listing off the market until the Days on Market counter resets.

    The moral of this story depends on if you are a buyer or seller.

    If you are a buyer, make an offer on that home that seems priced too high! Especially if the listing has some time on it. There are investors that make a good living on this strategy with bank foreclosures.

    If you are a seller. Then consider market feedback. If you are getting showings consistently but no offers, your price is most likely too high. (Perhaps condition, staging, etc will make a difference). If you are not getting any showings at all then your price may be really high and also you need to check the marketing.

    Happy Home Selling and Buying! and remember that Recent Home Sales Prices Tell Small Part Of Success Story.

  • Chattanooga Home Sales Strong Volunteer Site to Hunter Road 2013

    Chattanooga Home Sales strong Volunteer Site to Hunter Road 2013Chattanooga home sales strong Volunteer Site to Hunter Road 2013. This Chattanooga Realtor loves looking at recently sold home numbers. Over 8 homes sell each month in this area and currently there are only 39 homes for sale. This is a relatively small physical area compared to some of the other MLS divisions. Popular neighborhoods include Hamilton on Hunter, Flagstone, Hunter Village, Hunter Glen, Magnolia Creek, Crooked Creek, and Twin Oaks.

    Most of the area is zoned for Wallace A Smith Elementary, Hunter Middle and Central High School. The MLS area named (Volunteer Site to Hunter Road) is mostly in Ooltewah zip code of 37363.

    The average price home sold for $164,259 in the last year. With no consideration for year built the sold homes average $83 per foot. Hamilton on Hunter is the largest of the neighborhoods.

    Jobs at Volkswagen and Amazon are a huge reason for this area’s success. Modest homes in the meat of the Chattanooga market create a great home selling market.

    Of all the Chattanooga MLS areas, the Volunteer Site to Hunter Road area has the lowest months of inventory currently. A close second is Red Bank. I find that interesting, because Red Bank recently experienced a recent washout of commercial property values.

    Chattanooga Home sales are fun to watch. If you considering a home purchase close to Volunteer Site to Hunter Road then do not blink if you find a decent match. This is the closest thing to a seller’s market in Hamilton County, TN. Chattanooga home sales strong Volunteer Site to Hunter Road 2013.

  • Hamilton County TN Home Inventory Low Below $325,000

    Hamilton County TN Home Inventory Low Below $325,000
    Marketing Home for Sale
    Hamilton County TN Home Inventory Low Below $325,000. Judging by last 6 months sales, Chattanooga real estate market is good for sellers IF you have a home priced for sale below $325,000. Months of inventory is in single digits for all homes below $325,000. What is months of inventory? The time in theory that it would take to sell all the existing homes for sale if no others entered the competition. Months of inventory is simply a barometer of the Chattanooga home market health. The market measured in this chart shows only Hamilton County, TN. You may wonder why inventory levels of lower price homes is not higher. I have written in earlier posts that the lower priced homes have not been selling as well. The fact is that fewer homes priced under $100,000 have sold in 2013, but the inventory levels remain low relative to the existing sales. My observation is that fewer foreclosures are selling and investor activity is slowing. Chattanooga homes are selling quite well, especially homes that are younger or have been rehabbed.

    If you have a house for sell that happens to be in a price range that extends into double digits, don’t panic. The chart is for the entire county. Not your subdivision or area of town. We need to dig a bit more for your neighborhood.

    Do you have a house for sell that is in a short bar, but it is not attracting an offer? Then my suggestion is to make your property more attractive, lower the price, or increase marketing to attract more potential buyers. (or perhaps all three)

    Selling a house is simple. Turning loose of home is difficult.

    Hamilton County TN Home Inventory Low Below $325,000. Perhaps it is time to consider a move!

    Hamilton County TN Home Inventory Low Below $325,000

  • Raccoon Mountain Inspires This Real Estate Agent

    Raccoon Mountain Inspires this real estate agent
    Raccoon Mountain Inspires this real estate agent

    Raccoon Mountain inspires this real estate agent.

    Last Friday I spent a good chunk of the day at TVA’s Raccoon Mountain.   TVA Raccoon Mountain Pumped Storage Plant is located just outside of Chattanooga and Lookout Valley.  Lookout Valley has been home to my family almost 13 years.  One of the most incredible blessings of this area is the TVA Raccoon Mountain Pumped Storage Plant.  The plant itself is an engineering marvel, but I am referring to the park and trail area in this article.  The park area is home to 21 miles of trails, picnic areas, boat ramp, and so much more.

    I need to bring balance into my life.  One of the most important relationships in my life is the one I have with my daughter.  She is a young adult, but to her papa she is still my little girl.  So what can be better than a day in the “park”.  We hiked a bike trail that meandered near the bluffs.  We played frisbee at the ball field.    We met volunteers near the volleyball area.   The volunteers normally greet folks at the visitor’s center.  The visitor’s center was closed for repairs this day so they were outside.  They handed us maps and told us stories about the facility and area.  But the best part happened when one lady pointed out a strange bug moving.  The bug was a cicada coming out of the shell.  We experienced a “birth”.  We took pictures and studied the intricacy of its new wings.

    Raccoon Mountain’s natural area has been a family favorite for the 13 years we have lived in Lookout Valley.  I love the views it the area offers.  Whether it is a picnic by the Tennessee River in the river gorge or watching eagles from the Visitor’s Center overlook, there is always something fun to see.  It provides a green peaceful place to see the beauty of our area from many different vistas.

    Mountain bikers love Raccoon Mountain.  Check out this website for events of SORBA, (Chattanooga Chapter of the Southern Off Road Bicycle Association).  We noticed a new biking parking facility with amenities for changing, air, and washing.

    We are not mountain bikers, but we found it easy to share the trails with them.  Regardless of  your interests or time, I highly recommend a visit to an incredibly beautiful spot.  Raccoon Mountain inspires this real estate agent and it very well can be a worthwhile visit for you as well.