Editor’s note: The following Q-and-A interview with Kimberly Dotseth, a broker-owner in San Diego, Calif., 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: Kimberly Dotseth
Years as a broker: 2.5
Number of sales agents who you supervise: 1
Years working in the real estate industry: 21
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: I created a more solid brand and solidified what makes my brokerage "green." I also stopped doing (most) work associated with bank-owned homes and short sales, and my regular business subsequently shot up. That decision changed my life. I had my best year since 2006 (in 2009). I have become more available, (between the hours of) 7 a.m. to 11 p.m. seven days a week, and that, too has changed how the public views me, I think.
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: They are more relevant, particularly if they’re small brokerages with an established broker in charge. I believe brokers working in the "big box" business model are completely irrelevant, as they don’t run the company or much of anything.
A: Having a broker’s license is obviously a higher sense of education and accomplishment and harder testing to get there, and I think consumers are starting to get that, but only if they’re savvy.
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: The fixed-rate commission plan some firms try to offer sellers is a breed of brokerages that simply can’t or won’t take off. Redfin comes to mind and I simply despise what they do — giving (a portion of) their commission to the buyer. What other profession does that? It undermines the value of a good, professional agent.
That said, I believe the 6 percent commission as a standard "must do" is dead. The average full-service commission is 5 percent and tends to dominate 95 percent of sale transactions. While this is a broad statement, sometimes you can get a really bad agent and pay the same price as if you’d tried harder and found someone great. So the public is frustrated all the way around.
You see more FSBO (for-sale-by-owner) transactions in the Midwest than anywhere in the country due to a different, trustworthy vibe in how deals get done there. (Many) of them do hire an attorney for final closing details. It’s a rare occurrence in San Diego, though.
Q: What are the most vital services, in your opinion, that you provide?
A: Unrelenting availability, unwavering knowledge of my market. I can and do sell exactly what my clients need and want. I work all the time and answer my phone. I … am very honest and trustworthy. If you tell me something, it goes in the vault. It all counts in my business! I can multitask, to the annoyance of many.
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: My availability and knowledge of San Diego is probably the thing of greatest value I have to share with agents. I pass along every nook-and-cranny detail I know. I share, and am open and never say or do anything that wouldn’t pass muster in court. Consequently, I have never been sued, threatened with a lawsuit or even ended up in mediation. Honesty is the best policy for agents and the public.
Q: What is the latest trend with home sales in your market area? Short-sale listings and sales? Bank-owned (REO) listings and sales? Purchases by first-time buyers? What is the latest trend with home prices? …CONTINUED
A: Short sales are definitely dying, thank goodness. They are the languishing properties now — those that don’t get asked to the dance. REOs are shabbily marketed and I avoid those listed by the handful of agents I know to be unethical or terrible. I seek out traditional sales because they’re more wholesome for my clients with fewer bad people in the deal.
REOs are terrible. Short sales are terrible. I aged 10 years in 2009 because of both. Short sales are banned from my life. I will drop a client if they insist on buying one.
Pricing trends? Well, I would say that we’re getting away from the "range" listing, which (I think) is a stupid invention. No one (seems to) know what it is or why it’s used. I see sellers picking one price and going with that. And sellers are more open to a price reduction if it’s truly necessary. Most are listing them priced correctly versus listing too high and hoping for any offer. I see more old-fashioned traditionalism returning to the San Diego market, but in fits and starts. First-time buyers are doing mostly FHA deals.
Q: What are buyers’ primary concerns these days? Has this changed in recent months?
A: "How can I steal a house?" That’s the most common question, worded a lot of different ways! That seems to be their greatest concern and it’s very ill-conceived. There is no stealing of anything going on in San Diego. Buyers will go through 10 or more offers before they finally "get" that they have to offer what the house is worth or be left on the sidelines due to other buyers getting the property.
Q: What are sellers’ primary concerns these days? Has this changed in recent months?
A: Will the buyer close? How can the buyer’s loan go wrong? What if my house doesn’t appraise? These are three very real concerns for every deal, regardless of price or neighborhood. I work my sellers through all these issues. Appraisal mishaps have cost my clients tens of thousands of dollars in 2009. The new Home Valuation Code of Conduct (HVCC) rules are ridiculous and over-regulated. We’ve swung so far the other way in terms of lender conservatism that it’s hurting deals — hurting buyers and sellers and me, personally.
Q: Are the demographics of buyers or sellers changing? Explain.
A: No. I see still mainly middle-class buyers as first-time buyers — young couples under 30 who make $75,000 to $99,000 a year. That is the first-time-buyer demographic. (Couples who have bought a home before) tend to be savvier and making well over $100,000 combined. Single buyers tend to be more of an anomaly now and don’t seem to be young Bill Gateses looking for their first McMansion. They’re looking for FHA condos or houses under $500,000.
Q: What types of properties are selling fastest in your market area and why?
A: The bungalow under $400,000 that is not bank-owned or a short sale is white hot. Be prepared to write an offer on day one of its listing, pay full price, and pay your own closing costs. You have to have your loan preapproved now to be taken seriously by anyone.
Q: What types of properties are selling slowest and why?
A: The homes that are $800,000 and over, especially if they have the additional Mello-Roos taxes (taxes for newer neighborhoods that pay for sewers, roads, schools). God bless those sellers, because that’s a bad combination. La Jolla is really on the downswing, but was due for a big correction. That’s not done yet.
Q: What is the largest investment you have made in technology in the past year, and has it paid off?
A: I invested in Twitter and my investment was zero. I am working with my second client from it already. Yes, it’s paid off and it changed my life, too. I plan to invest in a new WordPress Web site and perhaps blow up my current GreenBoxHomes.com site.
Q: In which areas have you reduced costs in the past year, and what has been the business impact of those cuts? …CONTINUED
A: I eliminated "just listed" and "just sold" postcards. Before I did that, I did one blow-out card that listed all my sales in the last year and nothing came of it: $400 out the window. I eliminated all digital marketing that I pay for. I am still paying for virtual tours.
Q: What is your forecast for the real estate market in 2010?
A: Microblogging on Twitter and perhaps on Facebook (although I personally don’t see it happening on Facebook) will change the way agent and client connect as soon as first-quarter 2010. I believe big-box brokerages are dying on the vine. Their demise will continue. REO properties have one last boost in them before they trickle off in later 2011.
In fact, they could have a couple boosts left, depending on how little or much banks decide to modify troubled home loans. Since banks don’t gain a whole lot from modifying, they could foreclose on a steady basis. But I think it will taper off by 2012. Expect very meek pricing gains for the next five years: 3 percent to 5 percent a year in San Diego, max. Unless you’re talking about homes that are under $500,000 now.
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: My greatest challenge is getting sellers’ attention, because I am very small, even though I sell a lot of real estate. I am primarily a listing agent and am working toward more work on television to "get noticed" so I can get back to selling a house a week, as I did before I went out on my own. I need more listings because I sell all that I get very quickly.
Q: Briefly describe a typical day for you, and what duties occupy the most and least time.
A: Wake up at 7 a.m. Lay in bed and catch up on Twitter and read incoming e-mails on (my) BlackBerry while watching the "Today" show until 7:30 a.m. or 8 a.m. Do my cat chores, including feeding and litter-box cleaning. Make bed. Make coffee. Read paper. Eat toast. Relish my life. Continue the "Today" show. Should be "done" with my time around 9 a.m.-ish. Move to my desk and scour the multiple listing service for new property changes. Work on whatever escrows are in place.
Try to have "The Price is Right" on in the background in my office, since it makes me happy to see people win prizes. Shower, dress, get "model gorgeous" (ha ha) for my time out in the world!
Attend inspections, do work errands, surf the Internet for work-related things. Keep MSNBC on almost all day. Eat lunch around 2 p.m. Try to see houses every day, even if just for my own curiosity. Try to get some sunlight on my eyeballs at this time. Shop for dinner daily like the French woman I am not. Do my daily marketing around 4:30 p.m., go home and make dinner for me and my husband, who has his own house and who comes over most nights around 7 p.m.
Eat with him, drink a glass of good Cab(ernet), and many nights adjourn to my desk to finish up computer stuff. The BlackBerry is my constant companion, so I miss nothing during the day or night. Watch vintage "Match Game" with husband if not working. We go out once a week or so.
Q: What is most misunderstood, by agents and/or by consumers, about the work that you perform?
A: That we collect large checks for letting people into houses. That we only do that. That is the least of what we do. I always tell clients they don’t pay me to show them homes. They pay me to negotiate for them and solve problems in escrow. My clients get one more thing from me, though: I stage all my listings for free, including furniture, if needed. And I green my sales for free after close of escrow if the client wants it.
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: If you’re frustrated or just getting started, be patient. You picked the right line of work. I waited my whole life for this work. When I was in my 20s, I dreamt of being a commission-only residential real estate salesperson. But I was a slave to a corporate paycheck and worked for Bank of America, Merrill Lynch, Lehman Brothers and other companies. I was in management, but someone else owned my time.
I tripped into commercial real estate with Grubb & Ellis for years in upper management, but finally broke into residential real estate sales in the late 1990s, and my work career (was) made. I am home. I am happy.
My dreams came true. My biggest comment to other brokers is to open your own shop. If you worked hard enough to get that precious broker’s license, you’re at the top of the heap. You owe it to yourself to hang your own shingle. I believe there is nothing a big brokerage can do for you. Recognition can be earned on your own. Yes, it takes time, but the last time you pay this and that brokerage fee out of your commission, you’ll be home free.
Kimberly Dotseth is broker-owner for Green Box Homes, based in San Diego, Calif.
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